Personal Finance Study Guide

Personal Finance Study Guide - Personal Finance Study Guide...

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Personal Finance Study Guide Income and expense statements: -Fair market value: amt. a willing buyer would pay to willing seller for a charitable item * IRS says that personal property must be in “good used condition or better” to qualify - Fixed expenses: expenses that recur at fixed intervals. Ex. Rent payments and car installment loans - Variable expenses: expenses in which you have substantial control. E x. Food, entertainment, and clothes -Disposable income: amt. of income remaining after taxes and withholding for such purposes as insurance and union dues . (equation ) Debt paymnt.-to-disposable income ratio= monthly nonmortgage debt repayments/disposable income -Discretionary income- the money left over once the necessities of living are covered, such as paying for housing, food, and other necessities; money is “controllable” Balance Sheet or Net Worth Statement -Liquid Assets: Asset that is easily and cheaply turned into cash-notably, cash itself and short-term securities. Ex. Cash, securities, life insurance.
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Personal Finance Study Guide - Personal Finance Study Guide...

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