Personal Finance Chapter 1
Key components:
1. Assess your financial plan 2. Set money goals 3. Write out a detailed plan 4. Execute your plan 5. Know your money personality 6. Regularly monitor your financial plan 7. Replace money myths with money truths
Personal finance is __% behavior and __% head knowledge.
80, 20
Loan
A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment (example: house mortgage)
Loan
A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment.
Interest
A fee paid by a borrower to the lender for the use of borrowed money.
Interest
A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount).
Consumer
A person or organization that buys/uses goods or services.
Consumer
A person or organization that uses a product or service.
Economy
A system by which goods and services are produced and distributed.
Personal Finance
All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.
Debt
An obligation of repayment owed by one part (the debtor/borrower) to a second party (the creditor/lender); in most cases this includes repayment of the original loan amount plus interest.
Debt
An obligation of repayment owed by one party (debtor/borrower) to a second party (creditor/lender).
Credit
The granting of a loan and the creation of a debt; any form of deferred payment.
Credit
The granting of a loan and the creation of debt; any form of deferred payment.
Financial Literacy
The knowledge and skill set necessary to be an informed consumer and manage finances effectively.
