financial stewardship ch 1

Systematic process that considers important elements of an individuals financial affairs in order to fulfill financial goal

are in tangible, paper assets such as savings accounts and securities (stocks, bonds, mutual funds, and so forth)

physical assets such as real estate and automobile, that can be held for either consumption to investments purposes

the total value of all owned by an individual, such as savings account, stocks, bonds, home, and automobiles

1.) improving your standard of living, 2.) spending money wisely 3.) accumulating wealth

results that an individual wants to attain, such as buying a home, building a college fund, or achieving financial independence.

the medium of exchange used as a measure of value in transactions

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 goal 5.) use financial statements to evaluate results of plans and budget, taking corrective action as required 6.) redefine goals and revise plans and strategies as personal circumstances change.

-Demographics and income -Age, marital status -Education -Where you live -Career

the players and the economy

financial planning envorment contains various interrelated group of players,each fulfilling certain goals :government, businesses and consumers.

monetary policy : controls money supply -used to stimulate to contract economic growth fiscal policy :controls level of taxation . -sets levels in government spending

the necessities comforts and luxuries enjoyed or desired by an individual or family

-assets acquisition planning -liability and insurance planning -savings and investments planning -employee benefits planning -tax planning -retirement and estate planning

the phase of the economic cycle when real GDP increases until it hits a peak

the phase of the economic cycle when an expansion ends and a contraction begins

the phase of the economic cycle when real GDP falls

the phase of the economic cycle when a contraction ends and an expansion begins

a state of the economy in which general price level is increasing