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PF-Unit 5
Study Guide for Exploring Personal Finance ( 7 & 8th grade)
| Term | Definition |
|---|---|
| values | has a great effect on a person's spending decisions. |
| need | thought to be a necessity or an essential item required for life. |
| want | something unnecessary but desired, increases the quality of life. |
| spending plan | a tool to help people manage their money. |
| income | money earned. |
| expense | money spent. |
| major spending plan categories | savings,insurance,housing,transportation, food, other expenses. |
| taxes | required citizen charges by government provide goods and services. |
| net income | money left over after taxes have been deducted. Also known as take home pay. |
| savings | income not spent on current expenses, provides money in case of emergency, recommended at least 10% of income. |
| gross income | money earned before taxes are deducted. |
| insurance | arrangement between an individual and insurance company. |
| fixed expenses | same amount every month. |
| flexible expenses | vary from month to month. |
| periodic expenses | expenses that can be paid quarterly, semi annually, or yearly. |
| variable expenses | expense that can be the same amount each month or fluctuate each month. |
| PYF | Pay Yourself First. |
| health insurance | pays a portion of health care expenses if one is sick or injured. |
| life insurance | provides financial support to an individual's beneficiaries upon death |
| track with register | track income and expenses as you write checks and withdraw money. |
| budget spreadsheet | each time you receive or spend money enter the amount in the appropriate cell for that category and update the totals. |
| personal finance software | programs that help you monitor and track your budget. |
| Components of a Spending Plan | Income, expenses, net gain/net loss |
| net gain | remaining money to either save, spend or invest |
| net loss | individual is spending more money than he/she is earning. |
| Benefits to creating a Spending Plan | Track income and expenses, help individuals live within their means, & help individuals meet financial goals. |
| Spending Plan Development Steps | Track current income, create personalized income and expense categories, allocate money to each category, implement and control, evaluate and make adjustments. |
| If expenses were to exceed income on a spending plan, what would be a financially smart solution? | decrease expenses |
Created by:
rray
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