1. Ch. 16-1 Personal Finance Personal Finance

2. How much money will the average American earn in their working lifetime? (35 years) How much money will the average American earn in their working lifetime? (35 years)

3. The average American will earn over $2 million working over their working lifetime (35 years). The average American will earn over $2 million working over their working lifetime (35 years).

4. What percentage of American households spend more than they make in a given year? What percentage of American households spend more than they make in a given year?

5. About 43% of American families spend more than they earn each year. About 43% of American families spend more than they earn each year.

6. What is the average amount of credit card debt per household? What is the average amount of credit card debt per household?

7. Average households carry about $9,000 in credit card debt. Average households carry about $9,000 in credit card debt.

8. What is the average total amount of debt per household NOT including mortgages? What is the average total amount of debt per household NOT including mortgages?

9. The average American household owes $18,654 per household NOT including mortgages The average American household owes $18,654 per household NOT including mortgages

10. Money management is a HUGE problem in today’s society. Money management is a HUGE problem in today’s society. Our generation has a choice to make. Our generation has a choice to make.

11. Money-management: Refers to the day-to-day financial activities associated with using limited income to satisfy your unlimited wants and needs. Money-management: Refers to the day-to-day financial activities associated with using limited income to satisfy your unlimited wants and needs. –Good money-management takes: knowing and understanding your financial status knowing and understanding your financial status DISCIPLINE! DISCIPLINE!

12. Personal Balance Sheet- Record of assets and liabilities at a point in time. Personal Balance Sheet- Record of assets and liabilities at a point in time. Personal assets- Items of value (i.e. money in bank accounts, investments, furniture, clothing, automobiles, jewelry, etc) Personal assets- Items of value (i.e. money in bank accounts, investments, furniture, clothing, automobiles, jewelry, etc) Liabilities- Amounts owed to others (i.e. credit card balance, car loan, mortgage, personal loans, etc.) Liabilities- Amounts owed to others (i.e. credit card balance, car loan, mortgage, personal loans, etc.) Net Worth (owner's equity)- The difference between assets and liabilities Net Worth (owner's equity)- The difference between assets and liabilities

13. Cash flow statement- Reports net wages and other income along with spending for a period (Income-spending). Cash inflow- Money you have available to spend as a result of working or from other income, such as interest or investments Cash outflow- Amounts spent on food, clothing, transportation, living expenses, etc. The difference between inflow and outflow will affect net worth. Cash flow statement- Reports net wages and other income along with spending for a period (Income-spending). Cash inflow- Money you have available to spend as a result of working or from other income, such as interest or investments Cash outflow- Amounts spent on food, clothing, transportation, living expenses, etc. The difference between inflow and outflow will affect net worth.