chapter 10 - money matters

Maria's older cousin asks her about her financial goals. Which response shows that Maria may need some help in preparing a budget?

"I want to have more money."

Identify the fundamental step for managing money

Develop a budget.

Select all that apply Initial questions to ask when developing an understanding of the role that money plays in your life include which of these?

Do I know where my money goes? Do I spend more than I think I should? Do I have the cash I need to buy the things I want?

True or false: Applying for financial aid is a waste of time because there isn't much money available.

False

True or false: There are no significant drawbacks to the use of credit cards.

False

Upon receiving your financial aid package, you discover that it is not sufficient enough to cover your college costs. What should you do first?

Get the financial aid office to take a second look at your application.

Select all that apply Identify the possible drawbacks to using a credit card.

Interest rates can be high. It's too easy to spend money. Your credit rating can be damaged.

(blank) loans are available to students who are U.S. citizens or permanent residents and are registered for classes at least on a half-time basis.

Stafford

Which of the following is true of credit cards?

They are not necessarily bad.

Identify the outcome that is NOT likely if you try to hide from those to whom you owe money.

They will forget about it.

Identify an example of when it may be advantageous to accept a credit card with an annual fee.

When the card has an exceptionally low interest rate.

Select all that apply Identify the two reasons not to apply for more financial aid than you need.

When you take more, others may not be able to get what they need. It is unwise to load yourself up with unnecessary debt.

Select all that apply Identify the events that will make it necessary to review and possibly revise a budget.

You received more financial aid than anticipated. Your hours at work were cut.

Select all that apply Identify events that qualify as emergencies in most cases and would be appropriate for using a credit card.

Your car breaks down and you cannot get to work. You need a plane ticket to get to your grandmother's funeral.

Be extremely wary of websites that ask for ________ to provide you with online information regarding scholarships and financial aid for college.

a credit card number

Identify the first, second, third and fourth step in dealing with financial difficulties.

Asses the problem, contact each of your creditors, see a credit counselor, once you have a plan, stick to it

Parents who claim the student as an income tax deduction are eligible for (blank) loans to assist with college costs.

Blank 1: PLUS

There is substantial variation in the (blank) rates of credit cards, which is the percentage charged on the unpaid balance of the account.

Blank 1: interest or interest rate

Funding for college comes in three basic categories: (blank) ,(blank) , and (blank) . (Remember to type only one word per blank.)

Blank 1: loans Blank 2: grants Blank 3: scholarships

PLUS loans can be paid back over a period of ________ years.

10 to 25

When you have a budget, you generally want to keep track of your spending. How can using a credit card add some convenience to that process?

A credit card provides a record of purchases.

It would be shortsighted to decide not to bother with an education because of the cost. You may, however,

need to choose a school according to its tuition and the financial aid package it offers.

(blank) grants are provided to undergraduate students who have earned no previous degrees and are based on need.

pell

The key to finding sources of funding for your education is

persistence.

Developing an effective budget depends on your determination of

short- and long-term financial goals.

You know that a credit card expenditure can be justified as an emergency expense when

it is a life saver.

Select all that apply In what ways can using a credit card affect your credit history?

lead to a good credit history help establish a credit history lead to a bad credit history

Identify the funding source for college that must be paid back

loans

To get an overview of your expenditures,

look at your bank records, bills, and receipts for the last year.

Perkins loans typically have a ________ interest rate.

low

Budgets are not set in stone and should be monitored in order to

maintain control of your finances.

What is the major product that banks sell?

money (loans)

(blank) are awarded by the college, a company, or other organization to be applied to the cost of tuition, and they do not have to be paid back.

Blank 1: Scholarships or Scholarship

Some credit cards have a(n) (blank) (blank) , ranging from $20 to $100 a year.

Blank 1: annual Blank 2: fee or FEES

It is recommended that you review your budget each

month.

Qualifying for grants is

more difficult than qualifying for loans.

What is the first step in applying for financial aid?

Contact and discuss your needs with your campus financial aid counselor.

Identify the fundamental step for managing money.

Develop a budget.

Initial questions to ask when developing an understanding of the role that money plays in your life include which of these?

Do I have the cash I need to buy the things I want? Do I spend more than I think I should? Do I know where my money goes?

Select all that apply Identify the statements that reflect the value of a college education.

It is the kind of experience that permits us to reach our potential. Education leads to better job opportunities. On average, college graduates earn almost twice as much money as those with only a high school degree.

Select all that apply Which of the following go into building an estimate of how much you'll need to spend over the next year?

Look at your past expenditures to get an idea of your costs. Keep track of everything you spend for a week.

If, after a second look at your application, the campus is unable to assist you with meeting your financial needs to attend, you should

ask the financial officer for advice.

Select all that apply Students can receive student loans from

banks. credit unions.

A ________ helps to prepare for the unexpected, such as the loss of a job or an illness that would reduce income.

budget

A formal plan that accounts and plans for expenditures and income is a

budget.

Pell grants are awarded by

college financial aid offices.

It doesn't matter if you have an income; the mere fact that you are a ________ is sufficient for you to be approved to receive a credit card.

college student

Select all that apply Which of the following represent conveniences of using a credit card?

consumer protection in cases of defective merchandise online purchases

A person's (blank) (blank) is a record of past borrowing and payment behavior.

credit history

When you seek to resolve the problems caused by spending more than you make, which of the following financial options is generally most controllable?

decrease expenditures

College loan payments are often ________ until after graduation.

deferred

Financial aid applications require you to

do paperwork

A person or website service that requests payment to identity obscure scholarships that will yield thousands of dollars is very likely

doing something you can do yourself.

Select all that apply High levels of debt among college graduates has resulted from which of the following?

earning less than they thought they would after graduation the relative simplicity of getting college loans

Perkins loans are made on the basis of

exceptional financial need.

The most up-to-date financial aid information is available from your campus

financial aid office.

Select all that apply A scholarship may be awarded based on

financial need. merit.

Remember that when you ________ you must begin to repay student loans.

graduate

Similar to a scholarship, a(n) (blank) is an award of money that does not have to be repaid.

grant

Select all that apply Identify the basic categories of funding for college.

grants loans scholarships

Select all that apply Identify the two things you can do when you have found that you spend more than you make.

increase income decrease spending

What is one way that banks and other lending agencies make money?

interest charges

The (blank) (blank) (states as a percentage) determines what is charged for the use of loaned money

interest rate

Money is generally not loaned, whether by an institution or an individual, without charging a(n)

interest rate.

Drag and drop the steps of a financial aid application process in order from the first to the last

speak with financial aid counselor, decide how much you need, fill out your colleges application for financial aid, write a personal letter to explain any special circumstances, complete fafsa and css profile, wait

The length of time associated with a loan is referred to as the ________ of the loan.

term

Finding the money to pay for college takes which other scarce commodities?

time and energy

An important first step of wise money management is

understanding the role money plays in your life.

A loan that is ________ accumulates interest while a student is in college.

unsubsidized

A(n) (Blank) interest rate can move up or down each month.

variable

Payments on college loans being deferred until you graduate assumes that

you will begin to earn an income after graduating.