Managing Your Personal Finances and Financial Influences

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 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

The purpose of a personal budget is to make a plan to organize and manage your money.

• True

• False

Method of weighing the costs against the benefits of an action, purchase, or financial decision.

• cost-benefit analysis

• marginal benefit

• marginal cost

What are the steps in the Systematic Decision-Making

• Define problem

• explore alternatives

• choose the best alternative

• act on the decision

• evaluate the decision

Your financial future is in your hands.

• false

• true