Financial Literacy Chapter 8 Review

What strategy should a person focus on when preparing a budget?

The amount earned on the principal savings or investment

What is NOT considered to be a financial record?

Things that one owns

The value of all of your assets minus your liabilities

The amount you save or invest that earns money, or increases in value, over time at an annual percentage rate

Short-term savings is money you put away for major expenses in the future.

The amount of money you put aside for future use

The amount of money left after paying all current necessities, such as rent, food, and clothing

Documentation for financial transactions, such as pay stubs, bank statements, loan contracts, and insurance policies

The concept of paying into your savings first, and then living on the remainder of your take-home pay

Which of the following is considered to be an asset?

A detailed estimate of income and expenses for a specific period of time

The concept of paying into your savings first, and then living on the remainder of your take-home pay is called

Disposable income is the amount of money left after paying all current necessities, such as rent, food, and clothing.

Net worth is the value of all of your liabilities minus your assets.

A projection of income and expenses

A detailed estimate of income and expenses for a specific period of time is known as a

Money you put away for major expenses in the future

The sooner you begin saving, the more time your money has to grow.

Gross earnings minus applicable personal income taxes

Savings that you may need over the next one to three years, such as a car repair, an appliance or cell phone replacement

Something that is owed by an individual or business

The amount earned on the principal savings or investment is called interest.

A difference between the amounts in your budget and the actual amounts received as income and spent for expenses