HDFS 454: Family Resource Management

What is resourcefulness? The ability to identify and use resources effectively to meet needs. What is orchestration power? The power to make major decisions for the family unit. What is implementation power? The power or responsibility for day-to-day decisions and for carrying out major decisions. What is equitable exchange? Receiving something of comparable value to what is given. It involves fair pricing and depends on the interaction and relationship between those involved. What does the theory of relative resources say? The partner with more resources tends to hold more power in a relationship. What are human resources? Resources unique to people, including cognitive and physical abilities, time, energy, effort, and behavior. What is human capital in these slides? A person's ability, behavior, effort, time, and energy that can be used to accomplish tasks. Why might a person invest resources in a group? Commitment, engagement or care, desire for excellence, and expected rewards or return on investment. What does the S in SMART stand for? Specific: What exactly will you do? What does the M in SMART stand for? Measurable: How will you know it worked? What does the A in SMART stand for? Achievable: Is it realistic right now? What does the R in SMART stand for? Relevant: Why does it matter? What does the T in SMART stand for? Time-bound: By when? What are standards in resource management? Perceptions of what quantity and quality are adequate or acceptable. Standards influence goals and can develop across generations. What are the four steps of the planning process? Identify a situation that requires action; formulate a plan; implement the plan; evaluate its success or failure. What are objectives in a plan? Key events or specific steps plotted along the way to a goal, with tasks assigned to participants. What is a need? Something necessary for basic well-being or functioning, such as groceries, essential transportation, or prescriptions. What is a want? Something desired but not essential, such as a coffee shop drink, decorative purchase, or delivery meal. What is the 50/30/20 budgeting guideline? Allocate 50% of after-tax income to needs, 30% to wants, and 20% to savings and debt repayment. How would you allocate $1,000 using 50/30/20? $500 needs, $300 wants, $200 savings and debt repayment. What is an asset? Something you own that has monetary value, such as cash, savings, a vehicle, or a home. What is a liability? An amount you owe, such as a loan balance or unpaid credit card balance. What is net worth? Total assets minus total liabilities; a snapshot of financial position at one point in time. What is Sarah and Steve's total assets? $227,000: $12,000 savings + $150,000 house + $15,000 motorcycle + $50,000 investments. What is Sarah and Steve's total liabilities? $125,000: $100,000 mortgage + $10,000 motorcycle loan + $15,000 credit card debt. What is Sarah and Steve's net worth? $102,000: $227,000 assets minus $125,000 liabilities. What is Alex's net worth in the lecture example? Negative $1,100: $15,700 assets ($1,200 + $8,000 + $1,000 + $2,000 + $3,500) minus $16,800 liabilities ($1,800 + $15,000). What is the difference between an expense and a liability? An expense is money spent or a cost incurred during a period; a liability is a debt still owed at a particular point in time. A paid car installment is an expense; the remaining loan balance is a liability. In the review-guide sorting exercise, what is income? The paycheck deposited into checking. In the sorting exercise, what are fixed expenses? The paid car payment and paid child care payment, assuming their amounts are regular and predictable. In the sorting exercise, what are variable expenses? The flu shot, paid cable bill, and $3.80 coffee. Cable may be treated as fixed if its monthly amount is consistent; check the class example. In the sorting exercise, what are monetary assets? Cash in the wallet; the paycheck deposited into checking becomes part of the checking balance after deposit, though it is recorded as income for the period. In the sorting exercise, what is a tangible asset? The signed Mickey Mantle photograph, if it has a resale value. In the sorting exercise, what are short-term liabilities? The $550 owed to VISA and the unpaid Consumers Power bill. In the sorting exercise, what are long-term liabilities? The student loan balance and the amount left to pay on the car loan. What is an income and expense report or cash-flow statement? A record of money received and money spent over a period; net cash flow equals income minus expenses. What is disposable income? Income remaining after taxes and mandatory deductions. What is discretionary income? Income remaining after taxes and necessary expenses, available for choices such as optional spending or additional saving. What is a budget? A plan for expected income, spending, and saving over a specified period. What is revolving or open-ended credit? A reusable credit limit that can be borrowed, repaid, and borrowed again, such as a credit card or line of credit. What is installment or closed-ended credit? A set amount borrowed and repaid over a defined period, such as an auto loan, mortgage, personal loan, or student loan. What is secured credit? Credit backed by collateral or a deposit, such as a mortgage, auto loan, or secured credit card. What is unsecured credit? Credit without pledged collateral, such as a standard credit card, unsecured personal loan, or student loan. Can a credit account be both secured and revolving? Yes. A secured credit card or home equity line of credit can be both secured and open-ended. Can a credit account be both unsecured and installment? Yes. A student loan or unsecured personal installment loan can have both features. How does a secured credit card work and whom can it help? A cash deposit backs the credit line. Responsible use can help someone establish or rebuild credit. What is a credit limit? The maximum amount a lender permits a borrower to use on a credit account. What is a benefit of responsible credit use? It can build positive credit history and improve access to future loans and potentially better rates. How can a credit card user avoid purchase interest? Usually by paying the full statement balance by its due date when a grace period applies. What are the three major credit bureaus? Equifax, Experian, and TransUnion. What do credit bureaus do? They collect and maintain credit data reported by lenders, including account status and inquiries. Not every lender reports to every bureau; scoring models use report information to calculate a score. What are the five standard FICO score factors and weights? Payment history 35%; amounts owed 30%; length of credit history 15%; credit mix 10%; new credit 10%. What does 'more debt' on the review guide likely refer to in FICO factors? New credit (10%), which includes recent applications and new accounts. Confirm the professor's wording at review. What is ALICE? Asset Limited, Income Constrained, Employed: households earning above the federal poverty level but struggling to afford basic necessities. What was Michigan's general minimum wage on September 26, 2026? $13.73 per hour, effective January 1, 2026. Scheduled to rise to $15.00 on January 1, 2027, then adjust annually under state law.