REVIEW-U7-Financial Planning

A is a plan for how you will spend and save your money over a period of time.

Budgets help people control spending, prepare for emergencies, reduce financial , and live within their income.

The process of forecasting future income and expenses is called .

A cash flow statement shows money coming in called cash and money going out called cash .

Salary, wages, gifts, and lottery winnings are examples of cash .

Rent, food, insurance, and transportation are examples of cash .

A happens when cash inflow is greater than cash outflow.

A happens when cash outflow is greater than cash inflow.

Net Cash Flow = Cash Inflow − Cash .

If someone earns $2,950 and spends $2,800, they have a surplus of dollars.

A personal balance sheet shows assets, liabilities, and worth.

Assets are things you .

Liabilities are money you .

Homes, savings accounts, and investments are examples of .

Credit card balances, mortgages, and student loans are examples of .

Net Worth = minus  .

Liquidity refers to how quickly something can be converted into without losing much value.

Checking and savings accounts are considered very assets.

Houses and cars are considered liquid assets.

Needs are essential expenses required for survival and daily .

Streaming services, concerts, and gaming are examples of .

Discretionary income is the money left after paying for .

Opportunity cost is what you when choosing one option over another.

Financial goals that take less than one year are called -term goals.

Retirement is an example of a __________ -term financial goal.

SMART goals are Specific, , Achievable, Relevant/Realistic, and -bound.

The 50/30/20 budget recommends spending 50% on .

In the 50/30/20 budget, 20% goes toward savings and debt .

In a zero-based budget, every dollar is assigned a .

Envelope budgeting is also known as cash .

The “Pay Yourself First” method treats like a bill.

Rent and mortgage payments are examples of expenses.

Groceries and entertainment are examples of expenses.

Electricity bills are considered variable expenses because usage changes .

Moving to a cheaper apartment could reduce expenses.

Eating out less mainly reduces expenses.

Good financial habits include tracking spending, saving regularly, reducing unnecessary expenses, paying off debt, and for the future.

Budgeting helps people avoid unnecessary .

If someone consistently goes over budget, they should first reduce unnecessary .

Canceling , less,  and limiting expenses are ways to improve financial health