Mod 5 Test Review Money Management

Car Payment and Rent are examples.

A plan for how you are going to spend your money

What is your net worth? Assets = $20,000 Liabilities = $15,000

Assets used to secure loans that can be seized if you fail to re-pay the loan.

What is a short term goal?

When net income equals your expenses & savings. (Income=Expenses + Savings)

Which asset typically appreciates from this list?

You should create a personal property inventory for your assets for insurance claims in case of theft or damage. T or F?

Which one is a liability?

Net income is called "take home pay" or d________ income & is used to pay expenses.

Expenses that you can plan for (part of your budget, can be either fixed or variable).

An asset that declines in value.

Anything of value that you own.

Expenses that you do not plan for. This is why we create emergency savings.

When your expenses exceed your net income. (Income < Expenses).

A savings strategy (save 10% each month). You are the first expense in your budget!

Total fixed costs? Car Payment $500; Groceries $400; Rent $1,000; Utilities $600

If you have more debts than assets. Not a good thing!

Expenses that can change each month.

After paying all essential expenses, any money you have left over is called d_________ income.

What's one advantage of building up your net worth?

Outstanding debt that you owe (loans, credit card debt).

What is net worth? Read carefully!