Personal Financial Planning Flashcards

Front

What does the Family Life Cycle explain?

Back

It explains how a person changes financial position, earnings, consumption, and savings throughout the life cycle.

Front

Who introduced the Family Life Cycle and why?

Back

Marketers introduced it to define target markets.

Front

How was the Family Life Cycle extended in 2000?

Back

It was extended to the realm of personal finance.

Front

How many stages are in the Family Life Cycle?

Back

There are eight stages.

Front

Name the first four stages of the Family Life Cycle.

Back

Younger, single; younger couple, no children; couple, dependent children; single, dependent children.

Front

What is the purpose of categorizing the Family Life Cycle?

Back

To provide a framework to examine important issues for a variety of family units.

Front

What do scholars recommend regarding the Family Life Cycle?

Back

They recommend it as the initial tool when evaluating a family unit.

Front

What is the first step in the personal financial process?

Back

Budgeting finances.

Front

Why is recording accurate financial information important?

Back

To track expenses and income, apply for additional funds, save time and accounting costs, pay taxes on time, mitigate errors, and correctly budget finances.

Front

What do budgets assist with?

Back

Planning financial situations throughout the year, identifying shortages, acting as a control mechanism, seeing the larger picture, and reorganizing finances.