Personal Finance
Chapter 16
16-1 Key Terms:
Money management –
Personal assets –
Net worth –
Cash flow statement -
16-1 Checkpoints:
What are some characteristics of a wise money manager?
What are three main categories of a personal sheet?
What do cash outflows represent?
16-1 Assessment:
1. Savings accounts and a home are examples of
a. liabilities
b. assets
2. A payment for rent represents
a. a cash inflow
b. a cash outflow
c. a liability
d. an asset
16-2 Key Terms:
Fixed expenses –
Variable expenses –
Allowance –
Budget variance –
c. net worth
d. cash outflow
16-2 Checkpoints:
What are the main purposes of a budget?
What are eight commonly used budget categories?
What are five characteristics of an effective budget?
16-2 Assessment:
1. True or False…Retirement planning is usually considered a short-term goal.
2. A major purpose of a budget is to
a. assist with comparison shopping
b. achieve financial goals
c. reduce a person’s enjoyment of life
d. gather data for using credit cards
3. The most uncertain aspect of the budgeting process involves
a. estimating variable expenses
b. determining net worth
c. estimating fixed expenses
d. setting financial goals
16-3 Key Terms:
Financial plan –
Individual retirement account (IRA) –
Estate planning -
16-3 Checkpoints:
List five recommended steps for financial planning…
What are common sources of income during retirement?
What common activities are needed when reviewing a financial plan?
16-3 Assessment:
1. A common source of retirement income is
a. disability income insurance
b. a mortgage
c. pensions
d. unemployment insurance
2. A long-term goal usually involves
a. less than two years
b. buying with a credit card
c. using the services of a financial planner
d. saving over many years