| A | B |
|---|
| Allowance | the amount budgeted for savings and other expenditures. |
| Annuity | an amount of money that an insurance company will pay at definite intervals to a person who has previously deposited money with the company. |
| Budget | a plan that allows you to meet your personal goals with a system of saving and wise spending. |
| Budget Variance | a difference between actual spending and planned spending. |
| Decision Making | is the process of considering and analyzing information related to personal and financial goals to determine an action plan. |
| Decision Making Steps | consist of (1) Identifying the goal; (2) Gathering information; (3) Analyzing outcomes; (4) Examining alternatives; (5) Making a decision; and (6) Evaluating Results. |
| Delayed Gratification | is the willingness to give up something you want now in return for something better later. |
| Estate Planning | an activity that involves the accumulation and management of property during one’s lifetime and the distribution of one’s property at death. |
| Financial Planning Process | is the process of defining goals, developing a plan to achieve them, and putting the plan into action. |
| Financial Planning Steps | consist of (1) setting goals; (2) analyzing information; (3) creating a plan; (4) implementing the plan; and (5) monitoring and modifying the plan. |
| Goal | is a specific statement of what you want to achieve, giving direction to your plan of action. |
| Individual Retirement Accounts | a tax-sheltered retirement plan in which people can annual invest earnings up to a certain amount. The earnings are tax free until time of withdrawal. |
| Long-Term Goal | is one that focuses on more than 1 year of time and requires delayed gratification. |
| Medium Term Goal (Intermediate) | is one that focuses on a 3-month to 1-year period. |
| Needs | consist of something basic for your survival such as food, clothing and shelter. |
| Opportunity Cost | is choosing one option over another one. |
| Pay Yourself First | is the setting aside of money for future use or other investments. |
| Pension | a series of regular payments made to a retired worker under an organized plan. |
| Personal Spending Record | consists of source records for keeping up with income and expenses. |
| Savings | is usually money you set aside for short-term goals. |
| Short-Term Goal | is one that is less than a 3-month time frame; focuses on immediate satisfaction |
| Smart Goals | are ones that are specific, measurable, attainable, realistic and time-bound. |
| Values | consist of a belief or idea that you consider important or desirable. |
| Wants | consist of something you desire to make your life more comfortable. |
| Inflation | a prolonged increase in the general price level |
