Personal Financial Planning 10-1

The trade-off made by making one choice instead of another is commonly referred to as a(n)

• trade decision

• personal preference

• economic choice

• opportunity cost

The ways in which people make, distribute and use their goods and services is called the

• opportunity cost

• short-term goals

• economy

• means of exchange

Spending, saving, and investing to have the kind of life that you want and financial security can be achieved by

• personal financial planning

• paying interest

• buying stock

• regulating inflation

Saving for a vacation next Summer or paying off small debts by the end of the year are examples of

• opportunity costs

• short-term goals

• long-term goals

• personal financial planning

The first step in the financial planning process is to

• develop your financial goals

• determine your current financial situation

• determine your needs and wants

• count your money

Personal financial planning requires that you make choices and evaluate risks. If you decide to wait until next year to buy a car, one risk that you may face is

• inflation rate risk

• the car color choice is unavailable

• the engine is old

• personal risk

The main reason that people have money problems is

• that they didn't go to college

• that they have too many mouths to feed

• that they don't get minimum wage

• that they do not plan ahead how they will use their money

The 3rd step in the financial planning process is

• Create a financial plan of action

• Develop your financial Goals

• Identify alternative courses of action

• Evaluate your alternatives

The way you spend, save and invest your money to have the kind of life you want as well as financial security is called

The beliefs and principles you consider important, correct and desirable are

• goals

• values

• economics

• liquidity