Term
| Average Propensity to Consume |
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Definition
| The percentage of each dollar of income, on average, that a person spends for current needs rather than savings |
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Term
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Definition
| A state of the economy in which the general price level is increasing |
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Term
| Personal Financial Planning Life-Cycle |
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Definition
| a systematic process that considers important elements of an individuals financial affairs in order to fulfill financial goals |
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Term
| Six-Step financial planning process |
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Definition
1.) Define financial goals
2.) Develop financial plans and strategies to achieve goals
3.) Implement financial plans and strategies
4.) Periodically develop and implement budgets to monitor and control progress towards goals
5.) Use financial statements to evaluate results of plans and budgets, taking corrective action as required.
6.) Redefine goals and revise plans and strategies as personal circumstances change. |
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Term
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Definition
| A financial statement that describes a person's financial position at a given point in time |
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Term
| Income and Expense Statement |
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Definition
| A financial statement that measure financial performance over time |
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Term
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Definition
| An individual's or family's actual wealth; determined by subtracting total liabilities from total assets. |
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Term
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Definition
| The actual value of an asset, or the price for which it can reasonably be expected to sell in the open market |
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Term
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Definition
| Total Net Worth divided by total assets; measures the degree of exposure to insolvency. |
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Term
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Definition
| Total liquid assets divided by total current debts; measures the ability to pay current debts. |
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