Download Finance Career Cluster Performance Indicators Explained

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Financial goals are influenced by two main factors: the time frame in which you want to
achieve your goals, and the type of need that inspires your goals. Goals can be short-term
(usually one year or less to achieve), intermediate (two to five years), or long-term (more
than five years). Also, some goals may happen every year, while others occur only
How you establish your financial goals may also depend on whether a goal you have set
involves a consumable good that you would use up quickly, a durable good that lasts longer
and usually costs more, or something intangible, such as your health or an education. Keep
in mind that while setting financial goals, they should be realistic, specific, have a clear time
frame, and should help you decide on what action to take.
Source: Kapoor, J. R., Dlabay, L. R., & Hughes, R. J. (2007). Personal Finance. Woodland
Hills, CA: Glencoe/McGraw-Hill.
Describe how to develop a personal budget.
A personal budget is a plan for saving and spending your money based on your income and
expenses. Start your budget by defining your needs and your goals, considering both shortand long-term goals. Write them down in a list, with a target date or time frame to reach
them. Next you will need to prioritize your goals, arranging the items in order of importance.
Then you must estimate your income and your expenses. In your income estimate, include
your wages or salary but count only your net (take home) pay. Other sources of income
might include tips, gifts, and interest earned on a bank account. Estimate your expenses in
two categories—fixed and variable. Fixed expenses are usually the same amount each time
you pay them. Variable expenses are those that vary each month.
Once these steps are completed, you create your budget. You can transfer your estimated
income and expenses to a paper or computerized budget form. Indicate your savings on the
budget, as well—you may want to consider this a type of expense. As you compare your
income to expenses, you should see if you have enough money coming in to pay all of your
expenses. It is important to be honest and realistic when creating your budget, even if it
means revising some things. Also, check your progress monthly and review your spending
carefully so you know if you have to cut back your expenses or increase your income.
Source: Kimbrell, G. & Vineyard, B. S. (2008). Succeeding in the World of Work. New
York, NY: Glencoe/McGraw Hill.
Explain the nature of tax liabilities.
Taxes are payments you make to the government for services they provide. Tax liability is
the total amount of taxes owed. Effective planning can reduce your tax liability, thus paying