personal finance credit/ budgeting

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two examples of institutions that are sources of credit are?

bank and credit union

a household cashflow worksheet is a useful tool when building a...?

budget

what do lenders look for when they approve a loan to an individual?

character capacity collateral

what are 2 ways to avoid financial debt?

1) budget 2) don't spend all your money

what are the three types of expenses?

1) discretionary 2) fixed 3) variable

list the 6 steps to creating a budget

1) establish financial goals 2) estimate and total your income 3) estimate and total your expenses 4) analyze current income and spending 5) prepare a budget 6) evaluate your budget

what are some advantages of using credit?

1) help acquire assets 2) buy now- pay later 3) emergencies

what are some disadvantages of using credit?

1) use too much- make too little 2) bad credit

experts recommend saving at least what percent of your income?

10%

to reduce spending you should study your expenses. what expenses should you look at first?

discretionary expenses

two reasons to use credit are?

emergencies and buy now pay later

if you spend more than you earn, what should you try to increase?

income

what is capacity?

income to comfortably make payments

if the net amount in your monthly budget is negative, you may be...?

living beyond your means

what is an unsecured loan?

loans that are not backed up by other assets

what is interest?

money the bank pays you for leaving it in your savings account

by honestly evaluating your _____ versus _____, you can control excessive spending

needs/wants

a liability has a ________ economic value

negative

assets minus liabilities determine a persons...?

net worth

what is credit?

obtaining the use of money you do not have

what are some things you can do if you have a negative net worth?

pay off your debt or don't spend as much money

the main purpose of a budget is to?

slow down spending

what is philanthropy?

the act of giving money, goods or services to meet the needs of others and to support organizations and causes that are important to you

what is an expense?

the cost of goods and services that you buy

what does it mean to have a positive or negative net worth?

the difference between what you own and what you owe

if you do not have a full time job what are other ways to help out a charity?

time and talents

what is character?

will the applicant pay back the loan?

groceries are an example of?

a variable expense

what is a net worth statement?

a written record of an individuals current financial situation

discretionary spending does not pay for...?

fixed and variable expenses

what is collateral?

guaranteed based on an item that can be used to repay debt

a diamond necklace is an example of?

an asset

what does a charity refer to?

an organization that aids those in need

what is income?

any form of money received


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