Personal Finance
Financial Decisions flashcards
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- What is meant by “Need” in this lesson?Needs, wants, and goals
- A need is an essential requirement in a stated person's circumstances.
- What is meant by “Want” in this lesson?Needs, wants, and goals
- A want is a preference beyond the essentials in the described circumstances.
- What is meant by “Financial goal” in this lesson?Needs, wants, and goals
- A financial goal defines a desired money-related outcome.
- What is meant by “Time horizon” in this lesson?Needs, wants, and goals
- A time horizon is the interval before funds will be needed.
- What is meant by “Priority” in this lesson?Needs, wants, and goals
- A priority ranks goals when resources cannot cover all of them.
- What is meant by “SMART goal” in this lesson?Needs, wants, and goals
- A SMART goal is specific, measurable, achievable, relevant, and time-bound.
- What is meant by “Opportunity cost” in this lesson?Opportunity cost
- Opportunity cost is the next-best alternative forgone by a choice.
- What is meant by “Trade-off” in this lesson?Opportunity cost
- A trade-off exchanges one valued outcome for another.
- What is meant by “Time cost” in this lesson?Opportunity cost
- Time cost is the opportunity cost of time used for an activity.
- What is meant by “Sunk cost” in this lesson?Opportunity cost
- A sunk cost is past expenditure that the current choice cannot recover.
- What is meant by “Marginal decision” in this lesson?Opportunity cost
- A marginal decision compares the additional benefits and costs of one more action.
- What is meant by “Delayed gratification” in this lesson?Opportunity cost
- Delayed gratification postpones a current reward for a valued later outcome.
- What is meant by “Total cost” in this lesson?Comparing financial choices
- Total cost includes relevant upfront and ongoing expenses within a defined period.
- What is meant by “Unit price” in this lesson?Comparing financial choices
- Unit price expresses cost per comparable amount.
- What is meant by “Contract term” in this lesson?Comparing financial choices
- A contract term states a condition governing an agreement.
- What is meant by “Comparison shopping” in this lesson?Comparing financial choices
- Comparison shopping evaluates alternatives using consistent criteria.
- What is meant by “Affordability” in this lesson?Comparing financial choices
- Affordability concerns fitting an obligation within resources and other commitments.
- What is meant by “Decision criterion” in this lesson?Comparing financial choices
- A criterion is an explicit standard used to compare options.