unit 1 speedback assignment

Pick the scenario that best represents the most positive financial outcome. 1 Madeline has one credit card with a $500 maximum limit. Using her credit card will help her establish a good credit rating to show loan institutions that she is financially responsible. She does not pay any financial costs because she pays the entire amount she borrowed on that card each month so she does not incur interest. When the time comes that she desires to purchase a car, she will be a good candidate to receive a loan. 2 Tracey attends a private college where tuition is rather expensive. Before attending, she works at a part-time job and is able to save up enough money to pay for her books and supplies. However, she still has to figure out a way to pay for the expensive tuition, room, and board. She qualifies for a student loan, so she takes out the maximum amount possible, which exceeds the amount she actually needs. 3 Kevin and Jackie have incurred over $60,000 in credit card debt, have a house payment that is $1,595 a month, and own two cars. Their combined income is $55,000 a year. Thirty percent of their income is being spent to pay for their home (house payment and utility bills), and another 30% is being spent toward debt payments. However, they are able to pay more on their credit card payments than the minimum amount due. 4 Brett and Wendy are newlyweds that have accumulated loans totaling $5,000 for their wedding and honeymoon costs. They have a plan to pay off those loans in one year and another plan to save for a down payment on a new car.

1

People in the eighteen-to-twenty-four age bracket spend nearly what percentage of their monthly income just on debt repayment? 10% 30% 25% 20%

30 percent

Approximately how many American households or individuals declared chapter 13 bankruptcy in 2009? 150,000 750,000 350,000 550,000

350,000

. The best money-management strategy is which of the following? Keep a list of all your debt. Do not spend more money than you can pay back each month. Keep a list of all your income. Pay your debts on time to assure loan companies that you're a good risk.

Do not spend more money than you can pay back each month.

Which is the main reason some people choose to file a chapter 13 bankruptcy? A chapter 13 bankruptcy is not recorded on your credit report. It is a more conservative approach to bankruptcy. There are no negative consequences to this form of bankruptcy. The courts encourage people to file for chapter 13.

It is a more conservative approach to bankruptcy.

Good money management is important for which of the following reasons: learning how to make wise financial decisions understanding that loans cost more money than the amount actually borrowed being able to invest in a savings account all of the above

all of the above

Which of these would contribute to going into debt? spending more money than you make buying big ticket items without planning on how to pay for them taking money from your savings to pay for your grocery items all of the above

all of the above

What was the average college debt of graduating seniors in 2012? under $10,000 approximately $24,000 over $40,000 approximately $29,000

approximately 29,000

Which of the following is the best key component of financial literacy? being knowledgeable about credit and debt having the financial freedom to buy what you want, when you want it knowing how much interest is charged on a loan trying to earn more money to alleviate financial concerns

being knowledgeable about credit and debt

. According to the lesson, the average American household has accumulated how much credit card debt? more than $20,000 between $10,000 and $12,000 between $15,000 and $16,000 below $10,000

between 15,000 and 16,000

A chapter 11 bankruptcy is filed by which of the following? none of the above individuals families businesses

businesses

Which of the following best describes sound financial literacy? constant worry about your financial future keeping track of all your income gaining knowledge about how to handle your finances learning how to maximize your debt

gaining knowledge about how to handle your finances

Which of the following is not a key component of financial literacy? setting goals paying the minimum amount due on your credit cards each month establishing a budget examining your income and expenses

paying the minimum amount due on your credit cards each month

. Excessive debt does not contribute to which of the following? self-sufficiency increased health and stress possible bankruptcy family instability

self-sufficiency

How long will a chapter 7 bankruptcy usually remain on your credit report? ten years fifteen years five years one year

ten years

Define debt. income the ability to pay with cash the ability to pay toward your monthly expenses the state of owing money to someone or something

the state of owing money to someone or something

When is the best time to start learning money management principles? throughout your lifetime, to be ready to implement when you have money to manage in high school in college once you are married so you and your spouse can plan together

throughout your lifetime, to be ready to implement when you have money to manage

When is the best time to apply for a credit card? when you have enough income to pay your debts when you need the money when your parents can make your payments when you are eighteen years old

when you have enough income to pay your debts

Who should be most responsible for your finances? financial institutions your educators your parents you

you

A chapter 7 bankruptcy involves which of the following? You get another chance to incur debt. Your bankruptcy is recorded on your credit report for twelve years. You get to keep all your assets. You get a fresh start on your finances

you get a fresh start on your finances