Managing Personal Finances

Which is the best definition of personal financial planning?

• spending, saving, and investing money to enjoy life and achieve financial security.

• Listing ways to achieve your short-term and long-term financial goals.

• thinking about your attitudes toward money.

• using available sources of financial information.

Which term refers to things you want to accomplish?

• budgets

• risks

• expenses

• goals

Which is NOT one of the six steps of financial planning?

• Develop your financial goals.

• Apply for credit.

• Evaluate alternatives.

• Implement a financial plan of action.

which term refers to the risk of a general increase in the cost of goods and services?

• inflation risk

• interest rate risk

• liquidity risk

• income risk

Which term refers to the risk you may have to withdraw your savings or investments?

• inflation risk

• interest rate risk

• liquidity risk

• income risk

Which is NOT a way to limit your financial risk?

• Buy insurance

• Put all your money in one account

• Choose another alternative

• Diversity your assets

Which term refers to giving up something by making one choice instead of another.

• income risk

• personal risk

• liquidity risk

• opportunity cost

Which term refers to a plan for using your income in a way that best meets your wants and needs?

• opportunity cost

• a variable expense

• a budget

• a budget variance

Which term refers to the actual amount of money you earn or receive during a given period of time?

• income

• deductions

• gross pay

• expenses

Which term refers to money taken out of your pay before you receive your paycheck?

• income

• deductions

• gross pay

• expenses