Personal Financial Literacy
Which of the following is important to creating a successful financial plan?
Establishing clear goals.
A(n) ______ is anything that an individual spends money on.
Expense.
An individual's cash outflow.
Expense.
Cash inflow refers to money received from income but not other sources.
False.
The SMART method of setting goal does not recommend identifying a timeframe for completing specific goals.
False.
Websites such as eBay and Amazon are not good options to use when comparison shopping.
False.
You should set your sights high when setting intermediate-term and long-term financial goals, even if those goals are unrealistic.
False.
Monthly rent.
Fixed expense.
A projection about what will happen in the future.
Forecast.
Which of the following questions would you be most likely to ask when creating a plan for investing?
How much risk should I tolerate.
An individual's cash inflow.
Income.
Savings accounts, scholarships, and jobs are all potential sources of _____.
Income.
Allowance Nicole receives from her parents.
Inflow.
Interest Nicole earns from her savings account.
Inflow.
Financial goals that you can accomplish within the next year should be categorized as _____ goals.
Intermediate-term.
The amount of money you have left over each month is most directly related to your plans to manage ______.
Liquidity.
Which of the following is NOT a strategy for smart spending?
Making an impulse purchase.
Which of the following is the best example of a variable expense.
Monthly grocery costs.
Interest Nicole is charged on her credit card balance.
Outlow.
A psychological factor affecting spending that is typically used to create happiness is ________.
Retail therapy.
The likelihood of loss.
Risk.
In the SMART method of setting goals, which portion of the SMART acronym emphasizes the importance of putting your goals in writing?
Specific.
Which of the following statements about accomplishing financial goals is true.
There are often multiple ways for an individual to achieve his or her financial goals.
A good strategy for reducing impulse purchases is to wait 30 days and then decide if you still want the item.
True.
After you begin implementing a financial plan, you should regularly monitor your progress toward your financial goals.
True.
Before identifying and evaluating options for accomplishing your financial goals, you should evaluate your current financial position.
True.
Cash outflow refers to money that an individual spends.
True.
It is reasonable to expect a job to involve cash outflows as well as cash inflows.
True.
Long-term goals are those that will take five or more years to accomplish.
True.
Psychological factors can affect your spending habits .
True.
Shira wants to forecast her cash inflow cash inflow for the next four weeks from her job as a cashier at the supermarket. She earns $8.50 per hour and works two six-hour shifts per week. To make an accurate forecast, she could calculate the following: $8.50 x 2 x 6 x 4.
True.
Money spent on entertainment in one month.
Variable expense.
Money spent on gas in one month.
Variable expense.
For individuals, ____ is referred to as income.
Cash inflow.