Advanced Personal Finance Test 1

studied byStudied by 0 people
0.0(0)
Get a hint
Hint

Loss Aversion

1 / 18

flashcard set

Earn XP

Description and Tags

Behavioral Finance, Saving, and Budgeting

19 Terms

1

Loss Aversion

the tenancy to regard losses as considerably more important than gains of comparable magnitude.

New cards
2

FOMO

the tenancy to feel anxiety/fear that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media.

New cards
3

Heard Mentality

the tenancy to conform to the behaviors and beliefs of the people around you.

New cards
4

Sunk Cost

costs that have already been incurred and cannot be recovered.

New cards
5

Sunk Cost Fallacy

the tenancy to make decisions about a current situation based on what resources you have already invested in the situation.

New cards
6

Hedonic Adaptation

the tenancy to return to a baseline level of happiness regardless of whether you go through a positive or negative experience or event.

New cards
7

3 reasons to save money

emergencies, large purchases, and wealth building.

New cards
8

2 main strategies to save

50/30/20 rule, Pay yourself first

New cards
9

50/20/30 Rule

the essentials, savings and debt, flexible spending

New cards
10

where do you keep your savings?

not in a checking account

New cards
11

why do you not keep your savings in a checking account?

you don’t want your savings to be easy to spend but yo also need to be able to get to it when you need it.

New cards
12

Living Paycheck to Paycheck

using all or most of your monthly income on the things you need to live. Having no cash set aside for saving or investing.

New cards
13

Steps for Saving Large Purchases

identify what needs to be bought, determine the cost, determine when it needs to be bought, divide the cost by the time, save taht amount each month.

New cards
14

2 things you need to build wealth

money consistently invested, time

New cards
15

Questions you need to ask to see if it’s an emergency

Is it unexpected? Is it necessary? Is it urgent?

New cards
16

Gross Pay

total earnings before any deductions are taken.

New cards
17

Net Pay

total earnings after payroll taxes and other deductions have been taken out; also called take-home pay.

New cards
18

Fixed Expense

a cost that can be expected at regular intervals and that remains the same amount. (ex: monthly rent)

New cards
19

Variable Expense

a cost that appears irregularly or that changes amount. (ex: utility bills)

New cards

Explore top notes

note Note
studied byStudied by 174 people
... ago
5.0(3)
note Note
studied byStudied by 9 people
... ago
5.0(1)
note Note
studied byStudied by 2 people
... ago
5.0(1)
note Note
studied byStudied by 3 people
... ago
5.0(1)
note Note
studied byStudied by 10 people
... ago
5.0(1)
note Note
studied byStudied by 8 people
... ago
5.0(1)
note Note
studied byStudied by 865 people
... ago
5.0(1)
note Note
studied byStudied by 5848 people
... ago
4.3(15)

Explore top flashcards

flashcards Flashcard (43)
studied byStudied by 194 people
... ago
5.0(4)
flashcards Flashcard (23)
studied byStudied by 4 people
... ago
4.5(2)
flashcards Flashcard (30)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (595)
studied byStudied by 828 people
... ago
5.0(3)
flashcards Flashcard (87)
studied byStudied by 56 people
... ago
5.0(1)
flashcards Flashcard (29)
studied byStudied by 4 people
... ago
5.0(1)
flashcards Flashcard (75)
studied byStudied by 2 people
... ago
5.0(1)
robot