1. Chapter 16-1

2.  From the U.S. Census Bureau, Current Population Survey, Educational Attainment 2009 data, in a sample of 100 Americans:55 would have some college: 1 Professional degree 1 Doctoral degree 7 Master's degree 18 Bachelor's degrees 9 Associate's degrees 19 some college, no degree  45 would have no college: 31 would have a high school diploma, no college 14 would have no high school diploma  Combining Work-Life Earnings for Full-Time Employees* with the data above: Professional Degree: $4.4 million x 1 = $4.4 million Doctoral Degree: $3.4 million x 1 = $3.4 million Master's Degree: $2.5 million x 7 = $17.5 million Bachelor's Degree: $2.1 million x 18 = $37.8 million Associate's Degree: $1.6 million x 9 = $14.4 million Some College: $1.5 million x 19 = $28.5 million High School Diploma: $1.2 million x 31 = $37.2 million Some High School: $1.0 million x 14 = $14.0 million Total = $157.2 ÷ 100 = $1.572 million or about $1.6 million average life-time earnings

4.  Money Management refers to the day-to- day financial activities associated with using limited income to satisfy your unlimited needs and wants. ** This doesn’t mean never spending, doing without things, and not having any fun.**

5.  It does mean:  Set goals  Make wises decisions  Buy wisely  Live within your income

6.  Balance Sheet is a record of Assets and Liabilities at a point in time.  Assets are item of value  Liabilities are amounts owed to others  Net Worth is the difference between a person’s assets and liabilities.

7.  Personal Cash Flow Statement examines the changes in a person’s net worth.  Cash Inflows is the money you have available to spend as a result of working or from other income  Cash Outflows is amounts spent on food, clothing, transportation, other living cost.

8.  The final step in preparing the cash flow statement is to subtract the cash outflows from the cash inflows  If you spent less than you had coming in, the difference represents an increase in your net worth  If you spent more than you had coming in, you either had to use some of your savings or had to use credit to pay these additional expenses