Financial Planning Unit 1

Time management 

Time management is the process of planning and controlling how we spend our time.

Free time

Any period free from work, chores, or obligations. This period is usually used for relaxation.

Weekly master list

A single list that captures all tasks and ideas for the week. They help keep people organized and directed.

Stress

The body’s response to emotional demands or challenges.

To do list

A list of milestones to do within a day.

Procrastination

The act of delaying tasks despite being aware of the negative consequences.

Risk

This uncertain. As a result, it has the possibility of loss, harm, or negative consequences.

ABC Principle

Guides us to understand the consequences of our actions. As a result, we are prompted to evaluate the necessity of our actions.

Deposit-taking

The business activity of a bank or financial institution accepting money from the public for safekeeping.

Financial Intermediary

A "middleman" that connects people who have extra money (savers) with people who need to borrow money (borrowers). Examples: commercial banks and brokerage.

Semi-government

A company that is partially owned or controlled by the government, but also operates as a private business. Example: United States Postal Service (USPS)

Credit Rating

An evaluation of how likely and individual is likely to bay debt back. This is

determined through financial history.

Valuation

The process of figuring out how much a company is worth in money. In other words,  a way of estimating the current worth of an asset, company, or liability, using asset-based approaches.

Demand of time effect

Despite the demand of time, the supply of time says the same because time always stays the same.

Capital budgeting

Determining which projects a business should invest in.

Time management example

When an employee always works a full day, but never seems to complete any tasks, that employee needs to focus on:

Money market

A financial marketplace for buying and selling extremely short-term, low-risk debt. It is where banks, corporations, and governments borrow or lend money for a year or less. For individuals, it offers a safe place to put cash while earning a modest interest rate. Common investments in this market: Treasury Bills, Certificate of Deposit (CDs), Treasury bills (T-Bills), commercial paper.

Ethics

The set of moral rules and principles that guide a company and its employees. This encourages business employees to make right decisions. Business might develop standards to encourage this.

Return on capital

This measures how well a business generates cash flow. Positive this = the company is growing in value

Mortgage bank

A financial institution that specializes entirely in making and funding loans to buy real estate. This is a non-deposit financial institution.

Non-deposit institution

A financial company that provides loans, investments, and financial services, but does not accept traditional checking or savings deposits from the public. Examples: Mortgage Lenders, insurance companies, brokerage firms, and finance companies.

Accounts payable

An amount of money that a business owes to someone else

Finance

This is the business function that involves managing money. This ensures that the company’s financial goals are in line with organizational priorities.

Information Systems

This is a connected set of components that collect, store, process, and distribute data to create useful information. This helps keep communication flowing with other departments