Personal Finance and money management module 1 0w0

A cognitive bias in which an individual feels the weight of a loss more than that of a gain

an error in thinking.

• Loss aversion
• Endowment effect

• Anchoring effect

• Risk aversion

A cognitive bias in which an individual uses the first piece of information they receive about something as a reference point when comparing subsequent information.

• Availability heuristic
• Anchoring bias
• Confirmation bias
• Recency bias

An error in thinking in which an individual uses personal values and experiences to make a decision rather than logic.

• Emotional reasoning
• Cognitive bias

• Anecdotal fallacy
• Subjective bias

A cognitive bias in which an individual believes something is of value because the group believes it has value

• Herd mentality
• Peer pressure
• Conformity bias

A cognitive bias in which an individual looks for evidence that confirms what they already know or believe to be true

• Affirmation bias
• Confirmation bias
• Validation bias
• Agreement bias

A cognitive bias in which an individual prioritizes their needs and wants based on their present situation rather than a future outcome

• Present bias
• Endowment effect

• Time preference
• Future bias

A cognitive bias in which a person values an item more because they own it.

• Ownership bias
• Possession effect
• Acquisition distortion
• Endowment effect

The amount of income subject to income tax under the law after deductions and credits.

• Taxable income
• Net pay

• Gross pay

• Payroll

The amount of income received after any taxes or deductions.

• Net income
• Gross income
• Total income
• Pre-tax income

Taxes or expenses subtracted from gross income.

• Gross profit
• Operating income
• Deductions

• Revenue