Setting Financial Goal

Define "cash flow."

• The speed with which an employer makes an automatic deposit

• The same thing as interest earned, as in a savings account

• The measure of the money you receive and the money you spend

• A difference between the amount of money you are being paid and the amount you save

Explain the difference between "needs" and "wants" in financial planning.

• "Needs" are non-essentials like music CDs, while "wants" are essentials like food, shelter, and clothing.

• There is no difference between "needs" and "wants."

• "Needs" are essentials like food, shelter, and clothing, while "wants" are non-essentials such as movies and eating out.

• "Needs" are things you want, while "wants" are things your parents think you should save up for.

What does the acronym "SMART" stand for in setting financial goals?

• Specific, Measurable, Attainable, Relevant, Time-bound

• Simple, Maintainable, Attainable, Responsible, and Timely

• Smart, Manageable, Attractive, Relevant, and Time-bound

• Single, Money, Approach, Restraint, Thorough

A blueprint for handling all aspects of your money, such as spending, saving, investing, and establishing credit, is called _____________.

• a budget

• personal financial planning

• an allowance

• a credit card

What is the definition of the word "needs"?

• A condition requiring supply or relief; to be in need or want

• To desire greatly; wish for

• Specific, measurable, attainable, relevant, and time-bound goals

• An aim or purpose; an end to which effort is directed

What is the definition of the word "goal"?

• To postpone satisfaction until a later time

• To desire greatly; wish for

• Specific, measurable, attainable, relevant, and time-bound goals

• An aim or purpose; an end to which effort is directed

Preston saved his money for three years so that he could buy a car on his 16^th birthday. His dad told him, "If you buy the car, then I'll pay the insurance." However, Preston's dad lost his job a month before Preston's birthday, and told him that he couldn't pay for insurance until he got another job. Preston was really mad at his father because he had saved up for three years and now couldn't buy a car.

What should you tell Preston about financial planning to help him understand his father's position?

• "You should realize that your goal was unrealistic."

• "You should realize that your plan was too ambitious."

• "You should realize that your plan is not your father's plan."

• "You should realize that your wants are secondary to your dad's needs right now."

What is the definition of the term "SMART goals"?

• A condition requiring supply or relief; to be in need or want

• A principle, standard, or quality considered worthwhile or desirable

• Specific, measurable, attainable, relevant, and time-bound goals

• An aim or purpose; an end to which effort is directed

What is the definition of the term "delayed gratification"?

• To postpone satisfaction until a later time

• To desire greatly; wish for

• Specific, measurable, attainable, relevant, and time-bound goals

• An aim or purpose; an end to which effort is directed

What is the definition of the word "values"?

• To postpone satisfaction until a later time

• To desire greatly; wish for

• Specific, measurable, attainable, relevant, and time-bound goals

• A principle, standard, or quality considered worthwhile or desirable