Unit 3-Personal Finance Test Review
Key Terms:
Short-term goal: is something you wish to achieve in the next 1-2 months
Ex: save $30 over 3 weeks to buy a new car part
Medium- term goal: is something you wish to achieve in the next 3-12 months
Ex: save $50 or $15 a month for 1 year
Long-term goal: is something that you wish to achieve in the next year or more
Ex: save $6000 over 3 years to pay off a car
Fixed Expenses: expenses that you should be fairly predictable and consistent each month/year
You do not really have much control over them
Ex: Insurance, RESP, Rent/mortgage, tax, hydro cable, course fees etc
(Joining a school team, for you and family)
Variable Expense: Expenses that change on a monthly basis
You have control over them, so if you need to save money, these are expenses to look at trimming
Ex: Groceries cell phone, grooming, vacations, buyouts, swag, buying lunch etc (joining a school team, for you and family)
Budgeting Process: A plan for spending and saving
If you don’t budget your money= DEBT!
Future plans (eg Post secondary)
7 steps:
1. Puts you in control
2. Helps you create a visual spending picture
3. Helps you prevent impulse spending
4. Helps you decide what you can and cannot afford
5. Enables you to keep track of how you spend your money
6. Helps you create a savings plan

7. Helps you decide how you can protect yourself against the financial consequences of unforeseen events
What is takes:
1. Choosing a budgeting period
2. Estimating expenses and income
3. Balancing expenses and income
Setting Up and Maintaining a Budget:
1. Estimate your income
2. Estimate your expenses to include fixed regular/irregular monthly expenses, flexible monthly expense and personal expense
3. Estimate your future expenses
4. Cope with change
5. Keep your personal and financial goals in mind
6. Balance your budget
7. Practice setting up a personal budget
Transaction Or Withdrawal:
Deposit:
Hourly: wages are dependent on the number of hours worked
Hourly plus commission: the employee is paid for the amount of hours worked PLUS a percentage (%) of his/her sales
Salary: wages are based on a period of time, which is usually one year
Salary plus commission- wages are set for the time period, plus the employee earns a bonus percentage (%) for their sales. Often the salary is less so that the employee has incentive to sell
Piece Work: wages depend on the work to be complete. The employee is only paid for the work they do
Time and a half: the employee is paid an hourly wage, PLUS 50% of the hourly wage. This maybe offered if an employee is asked to work on a federal holiday such as Christmas
Overtime hours: this means that the employee has exceeded his/her regular hours of work and they will be paid extra for the excess hours. A regular work week can be anywhere from 37.5 hours to 40 hours
Lieu Time: this occurs when an employee has exceeded his/her regular hours of work. Here the excess hours are given as equivalent time off
EI: Employment Insurance
CPP: Canadian pension plan
Taxes-
Municipal (City)- Local police, parks and recreation, garbage/waste management etc