In the envelope budget, you put specific amount of your money into envelopes, mainly physical cash, representing different budget categories.
Envelope Budget
Things people desire for reasons beyond survival
Wants
Wants allow people to enjoy life more. T or F
T
The amount of income you planned for June was $1,500. The amount you actually received was $1,300, resulting in a... a. $200 favorable variance b. $200 unfavorable variance c. $100 favorable variance d. $300 unfavorable variance
b. $200 unfavorable variance
Goals achievable in over 5 years.
Long-Term Goals
debt
liabilities
What is philanthropy?
Charitable giving. Donating to charity, a church, or a cause such as Red Cross Hurricane Relief
Most people have enough resources to meet all their needs and wants. T or F
F
Budgeting is a critical part of managing your money. T or F
True
formal process that involves looking carefully at your current financial situation and thinking about your future.
Financial planning
Which of the following would be considered a cash inflow? a. net pay b. rent c. savings d. expenses
a. net pay
A budget is based on estimated cash inflows and outflows. T or F
True
Financial choices you make today will affect your finances and your wealth tomorrow and throughout your future. F or F
True
The amount you budgeted to spend on food for June was $500. The amount you actually spent was $1,300, resulting in a... a. $45 unfavorable variance b. $55 favorable variance c. $45 favorable variance d. both a & b
c.
A spending and saving plan based on expected income and expenses.
budget
expenses, or items for which you must spend money.
cash outflows
How many steps are in the Decision-Making Process?
6
The 50/20/30 budget, the 50 represents your wants. T or F
F
Philanthropy is a form of charitable giving that supports a societal cause. T or F
T
Everyone uses the same budgeting strategies. T or F
False
A personal net worth statement lists your _____________ and ____________ for a period of time.
income and expenses
What are benchmarks and how are they used?
Standards against which progress is measured
Goals achievable within 2-5 years.
Medium-term goals
osts that can go up and down. Examples are gas and electric bills, the price of your bill is dependent on how much you use.
Variable expenses
Theory stating basic needs must be met first.
Maslow's Hierarchy of Needs
Items for which you must spend money are called
Expenses
Things needed for survival
Needs
Professional providing financial advice for a fee.
Financial Advisor
Taking a look at your financial records is a good place to get started as you gather information for a financial plan. T or F
T
Short-term goals
achieable within one year
money or items of value
assets
The use of your personal information by someone else to commit fraud or other crimes.
Identity theft
osts that do not change each month. Examples of fixed expenses are rent, insurance, and car payments.
Fixed expenses
A __________________ lists your cash inflows and outflows for a period of time
personal cash flow statement
All assets, or items of value, increase in value over time. T or F
False
There is no correct budgeting strategy for any individual. T or F
True
The first step in preparing a budget is to plan the amount you will save each month. T or F
T
A budget is a plan. T or F
T
How many steps are required in financial planning?
5
income from your job, investments, and other sources.
cash inflows
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