BYUI -FCS 340 EXAM 2 MONEY MANAGEMENT
Monetary Assets - Answers -- financial resources that are legal tender (cash) or can be
converted to legal tender very quickly
- ex: currency in wallet, coins in a pickle jar, checkings/savings accounts, certificates of
deposit, money market accounts
Goals of effective cash management - Answers -- convenience
- cost
- consideration
- security
- gain
Convenience - Answers -easy-to-access services without travel or hassle
Cost - Answers -you are not charged fees and/or penalties
consideration - Answers -you can get personal help when you need it
security - Answers -low risk of losing any money
gain - Answers -you are paid some interest from those who use your cash
liquidity - Answers -refers to how quickly and easily you can access your money
emergency fund - Answers --liquid financial resources to meet unexpected and
immediate needs
- should total 3-6 months of living expenses (or even income)
Federal Deposit Insurance Corporation (FDIC) - Answers -- government agency which
deposits at most commercial banks up to $250,000 per depositor... $500,000 for joint
depositors
Checking Accounts - Answers -
National Credit Union Administration - Answers -
Savigns Accounts - Answers -
Credit Bureaus - Answers -Credit bureaus, also called credit agencies or credit
reporting agencies, are companies that collect credit
information about individuals. They then calculate a credit score for each individual
based on this information.
Note that credit bureaus are private, for- profit businesses-they are not part of the
government, though they
, are overseen by various government agencies. In the United States, the three major
credit bureaus are
Equifax, Experian, and TransUnion.
Payday Loan - Answers -a relatively small amount of money lent at a high rate of
interest on the agreement that it will be repaid when the borrower receives their next
paycheck.
Debt consolidation - Answers -The act of combining all debts into one monthly
payment, typically extending the terms and the length of time required to repay the debt.
Tracking Cash Flow - Answers -
Credit - Answers -An arrangement to receive cash, goods, or services now and pay for
them in the future.
Interest - Answers -A sum paid or charged for the use of money or for borrowing money
Refinance - Answers -To revise a loan agreement to make the
terms of payment more suitable to a
borrower's present income and ability to
repay.
PITI - Answers -Principal, Interest, Taxes, Insurance
Home Equity - Answers -The current market value of a home minus the remaining
mortgage balance
Mortgage - Answers -a specific type of loan that is used to buy real estate
One Percent - Answers -1 point when getting a mortgage = 1% of the property value
that you can pay to have a lower payment on your loan
Credit card - Answers -a small plastic card issued by a bank, business, etc., allowing
the holder to purchase goods or services on credit.
Monetary assets - Answers -Assets that can be quickly and easily converted into cash
Certificate of Deposits (CD's) - Answers -A savings alternative in which money is left on
deposit for a stated period of time to earn a specific rate of return.
Liquidity - Answers -the ease with which an asset can be converted into cash
Money Market account - Answers -a savings account that requires a minimum balance
and earns interest that varies from month to month
Monetary Assets - Answers -- financial resources that are legal tender (cash) or can be
converted to legal tender very quickly
- ex: currency in wallet, coins in a pickle jar, checkings/savings accounts, certificates of
deposit, money market accounts
Goals of effective cash management - Answers -- convenience
- cost
- consideration
- security
- gain
Convenience - Answers -easy-to-access services without travel or hassle
Cost - Answers -you are not charged fees and/or penalties
consideration - Answers -you can get personal help when you need it
security - Answers -low risk of losing any money
gain - Answers -you are paid some interest from those who use your cash
liquidity - Answers -refers to how quickly and easily you can access your money
emergency fund - Answers --liquid financial resources to meet unexpected and
immediate needs
- should total 3-6 months of living expenses (or even income)
Federal Deposit Insurance Corporation (FDIC) - Answers -- government agency which
deposits at most commercial banks up to $250,000 per depositor... $500,000 for joint
depositors
Checking Accounts - Answers -
National Credit Union Administration - Answers -
Savigns Accounts - Answers -
Credit Bureaus - Answers -Credit bureaus, also called credit agencies or credit
reporting agencies, are companies that collect credit
information about individuals. They then calculate a credit score for each individual
based on this information.
Note that credit bureaus are private, for- profit businesses-they are not part of the
government, though they
, are overseen by various government agencies. In the United States, the three major
credit bureaus are
Equifax, Experian, and TransUnion.
Payday Loan - Answers -a relatively small amount of money lent at a high rate of
interest on the agreement that it will be repaid when the borrower receives their next
paycheck.
Debt consolidation - Answers -The act of combining all debts into one monthly
payment, typically extending the terms and the length of time required to repay the debt.
Tracking Cash Flow - Answers -
Credit - Answers -An arrangement to receive cash, goods, or services now and pay for
them in the future.
Interest - Answers -A sum paid or charged for the use of money or for borrowing money
Refinance - Answers -To revise a loan agreement to make the
terms of payment more suitable to a
borrower's present income and ability to
repay.
PITI - Answers -Principal, Interest, Taxes, Insurance
Home Equity - Answers -The current market value of a home minus the remaining
mortgage balance
Mortgage - Answers -a specific type of loan that is used to buy real estate
One Percent - Answers -1 point when getting a mortgage = 1% of the property value
that you can pay to have a lower payment on your loan
Credit card - Answers -a small plastic card issued by a bank, business, etc., allowing
the holder to purchase goods or services on credit.
Monetary assets - Answers -Assets that can be quickly and easily converted into cash
Certificate of Deposits (CD's) - Answers -A savings alternative in which money is left on
deposit for a stated period of time to earn a specific rate of return.
Liquidity - Answers -the ease with which an asset can be converted into cash
Money Market account - Answers -a savings account that requires a minimum balance
and earns interest that varies from month to month
