Chapter 3 ( Time and Money )

What are the different options when it comes to financing your education ?

Scholarships, grants, work study, and loans.

What is a Subsidized Loan ?

A loan that you don't have to make payments on until you graduate and no interest accumulates until then.

What is an Unsubsidized Loan ?

A loan that you may be able to defer payments on until you graduate, but interest is added to the balance while you are still enrolled in school. Just like credit card interest, it compounds.

What is Backward Planning ?

A management technique in which you work backwards from assigned dates to plot out on your calendar when each step of a task needs to be accomplished.

What is a Creditor ?

A person or company to whom debt is owed.

What is a budget ?

A tool that helps you manage your money by showing your income and expenses.

What is a Federal Stafford Loan ? A. A fixed rate, interest student loan offered by the government for students attending college at least half-time B. "Free money" that you don't need to repay, distributed by higher educations institutions or other sources based on their own criteria of merit C. A scholarship granted to exemplary students by the U.S. government D. A grant given to students by the U.S. government that can be applied to tuition, fees, and other education expenses

A. A fixed rate, interest student loan offered by the government for students attending college at least half-time For a subsidized Stafford loan, the Department of Education pays the interest on the loan while you are in school (subject to certain time limits). For unsubsidized loans, the student is responsible for paying the interest from the time the loan is given.

Kade is trying to organize his expenses by deciding which ones are necessary and which ones are unnecessary this month. Which expense is most likely unnecessary? A. A hair cut B. Water bill C. Monthly rent D. Grocery bill

A. A hair cut

Mat has received a partial academic scholarship to his state university and has a part-time job. He still needs additional financial aid to cover his costs this year. What should he do ? A. Apply for a grant or loan to cover his costs B. Apply for a work-study program C. Apply for a SAR

A. Apply for a grant or loan to cover his costs Given that Matt already has a scholarship, his best option might be a grant or a loan that gets repaid after he finishes school.

When managing money, a person who is an Organizer is likely to: A. Keep balances of bank accounts accurately B. Spend impulsively C. Buy things on others D. Spend money on themselves mostly

A. Keep balances of bank accounts accurately

Tom is stressed because last month he had to use the money in his emergency savings account to pay his rent. He wants to evaluate his budget to decide if he needs to reduce spending right away. Which actions should Tom include when evaluating his monthly budget ? A. Locate the biggest differences between his actual and estimated budget B. Request more funds from the financial aid office C. Work more hours to add more income to his budget D. Look for unusual circumstances when he could not avoid overspending

A. Locate the biggest differences between his actual and estimated budget

How often must you file for federal financial aid ? A. Once a year B. Once a semester/term C. Once every two years D. Only the year you begin school

A. Once a year

Which option is a good suggestion for reducing borrowing on a credit card ? A. Plan ahead for large purchases so you can either pay cash or pay off the card right away B. Have three or four credit cards and only put a small amount on each one C. Put all small expenses on the card D. Charge the same amount every month

A. Plan ahead for large purchases so you can either pay cash or pay off the card right away

What is SAR ? A. Student Aid Report B. Student Activity Report C. Selective Aid Range D. Socioeconomic Assessment Requirement

A. Student Aid Report The SAR, generated after you complete the FAFSA, provides you with informations about your eligibility for federal student financial aid.

Which reason best explains why a student might decide to get a credit card that has a high-interest rate ? A. The card would be used only for emergencies B. The card offers a free, one-year subscription to a magazine C. The card has reward points that can earn a gas card or 1% cash back D. The card has a high credit limit

A. The card would be used only for emergencies

What is a syllabus ?

An outline of what you will be studying in a course that provides you with a list of tests and assignments, due dates for tests and assignments, course objectives and grade requirements, absence policies, and any other policies you should know.

What are savings ?

Any excess income you have after paying your bills. Though, in the case of paying yourself first, it is the amount you invest in savings before you spend your discretionary income.

Which option best describes the expected consequences of unplanned, mindless, or uninformed money choices ? A. Lower overall GPA and loss of financial aid B. A sabotaged budget and added stress C. Cancelation of academic merit scholarship D. An increased interest rate for financial aid loans

B. A sabotaged budget and added stress

Laura's credit card balance this month is $499.00. Her APR ( Annual Percentage Rate ) is 14.8%. The minimum payment due is $15.00. If she pays only the minimum each month and does not add any more charges, how long will it take her to pay of the entire balance ? A. About 1 year B. About 3 years C. About 6 years D. About 10 years

B. About 3 years

Lisa's credit card balance this month is $969.16. Her APR ( Annual Percentage Rate ) is 15.24%. The minimum payment due is $20.00. If she pays only the minimum each month and does not add any more charges, how long will it take her to pay off the entire balance. A. About 1 year B. About 6 years C. About 10 years D. About 3 years

B. About 6 years

When prioritizing your tasks to be completed in a day, you should always: A. Do the easiest tasks first so you will have more time for the harder ones B. Do what is most crucial first C. Complete your routine tasks D. Do what you like even if it is not urgent

B. Do what is most crucial first

Which group of expenditures best supports Franco's goal of obtaining a college education ? A. Latte each morning, snacks to help Franco study late at night, and football tickets to see the game as a much-needed break from studying B. E-textbooks, recommended supplemental texts for a course, and a computer C. Backpacks, new jeans, a calculator, and a study guide D. Tutor for a course Franco is doing poorly in, text for English 101, subscription to The New York Times online, and three new college logo t-shirts

B. E-textbook, recommended supplemental texts for a course, and a computer

One of the most important financial aid forms is the: A. COMPASS B. FAFSA C. LASSI D. SAT

B. FAFSA

What is the form you must complete to apply for financial aid from the U.S. government ? A. Student Aid Report B. FAFSA C. 401k D. FSA

B. FAFSA This is short for Free Application for Federal Student Aid.

Mike's take-home pay from his paralegal job is less than the total amount he spends. He is trying to reduce his expenses for next month. Which expense will most likely remain the same in spite of his best efforts to reduce spending ? A. Cost of transportation B. Federal Student Loan Repayment C. Cell phone expenses D. Cable bill

B. Federal Student Loan Repayment

Which option describes what information a student can learn from monitoring his or her budget for a month ? A. How much income one has coming in each year B. How much the student actually spent C. How much one intends to save over the summer D. How much is spent in a typical month on emergencies

B. How much the student actually spends

When you try to multitask, or do more than one task at a time you: A. Allow your brain to do several things at once B. Make errors and increase the amount of time needed to finish each task C. Improve the quality of your work D. Make fewer errors and reduce how much time you need to complete the tasks

B. Make errors and increase the amount of time needed to finish each task

Which of the following financial aid sources does not have to be repaid ? A. Student loans B. Scholarships C. Credit issued by your local bank D. Credit issued by a credit card company

B. Scholarships

Which type of financial aid does NOT have to be repaid ? A. FAFSA aid B. Scholarships C. Perkins loan D. Direct PLUS loan

B. Scholarships These do not have to be repaid and are awarded based on a variety of criteria, including achievement, nationality or ethnicity, financial need, or public service. Grants are another form of aid that don't need to be repaid. However, many grants, such as Federal Pell Grants, have a lifetime maximum amount that students can receive.

Which type of higher education financial aid is a federal fixed-rate loan for students who attend school at lead half-time? A. Pell Grants B. Stafford loans C. Merit-based scholarships D. Payment plans

B. Stafford Loans

Which option is an example of an unnecessary expense ? A. Rent B. Tickets to a movie C. Car insurance premiums D. Monthly utilities

B. Tickets to a movie

When creating a budget, which will give you the more accurate overview of your finances ? A. Your financial aid balances B. Your earnings, savings, and expenditures C. Your annual take-home pay D. Your annual gross pay

B. Your earnings, savings, and expenditures

Why is a syllabus effective to use when backwards planning ?

Because you are given the due dates for all assignments and tests beforehand in the beginning of the semester.

What does Financial Literacy mean ?

Being consciously aware of and responsibly managing your money to achieve your goals.

What is prevented by being self-aware of your tasks by using techniques such as to-do lists ?

Being surprised or discouraged if things do not go the way you originally planned.

What is a Loan ?

Borrowed money that must be repaid.

Let's say you borrow $5000 your first year with an interest rate of 6.7%, and you defer payments for 4 years. Your loan is unsubsidized. How much will you owe when you begin to make the payments ? A. $5500 B. $6000 C. $6500 D. $7000

C. $6500 Before you take a loan, determine with the lender what your monthly payments will be. Remember, not even bankruptcy will eradicate this type of debt. Be realistic about what you can pay after college.

Sandra is out shopping. She knows that she has to stay in her budget, so she should only buy items she needs now. Which item is one she might want, but does not need ? A. Printer paper to restock her low supply B. A graphing calculator for her calculus class to replace the one she lost C. An extra battery for her new laptop D. A book that explains concepts she's struggling with in biology class

C. An extra battery for her new laptop

Sarah, a senior, is on track to graduate on time with her bachelor's degree. She has a full load of tough classes but knows she can finish if she works hard. However, she needs $3500 more to complete her senior year. She does not qualify for need-based grants and has not been awarded a scholarship. What's her best option ? A. See if she can find any non-need based grants B. Go to school part-time and get a job C. Apply for a Perkins Loan or a Stafford Loan

C. Apply for a Perkins Loan or a Stafford Loan Perkins and Stafford loans often offer better loan terms compared to other lenders. If she's lucky enough to get a subsidized loan, she will not be charged interest on the loan while she is in school at least half-time. In addition, she may be able to negotiate the length of her repayment plan. But, she needs to be careful-a longer repayment plan lowers her monthly payments, but she will end up paying more interest on the loan.

Which option belongs on the Estimated Monthly Expenses chart? A. Scholarship money $1550 B. Savings $347 C. Cell phone bill $95 D. Wages from part-time job $200

C. Cell phone bill $95

Jim is living on campus for the first time. How can he protect himself against identity theft ? A. Write down his PIN numbers B. Throw away his credit card receipts C. Check all of his credit reports D. Keep his social security number in his wallet

C. Check all of his credit reports

Carlos is a single parent who recently graduated from techinical school and is continuing toward a Bachelor of Science degree. He knows he can get a small scholarship from his technical school but doesn't know what else might be available. He has a wife range of loan options but isn't aware of any other grants that may be available. What should he do ? A. Check with his financial aid office at his new school B. Research financial aid websites C. Do both of the above

C. Do both of the above There may be specific grants available because he is a single parent. In addition, his income may be low enough for him to qualify for federal or state grants.When searching online, Carlos should be careful to use reputable websites, such as the U.S Department of Education or FAFSA Federal Student Aid.

Which question is most helpful for determining a strategy for reducing borrowing on credit ? A. Can payments be made online? B. How much does it cost to get an extra card? C. How much interest will be charged during the repayment period? D. What is the penalty if a payment is late?

C. How much interest will be charged during the repayment period

Which questions is the most helpful for determining a strategy for reducing borrowing on credit ? A. Which bank issues the credit card? B. On which day of the month is the payment due? C. How quickly can I afford to pay off the total amount? D. What is the yearly fee that the card charges?

C. How quickly can i afford to pay off the total amount?

Which statement best describes the role of income in budget formulation ? A. Overestimate income, just to be on the "safe side" B. Income should be equal to or less than expenses C. Income should be equal to or higher than expenses D. Underestimate income, just to be on the "safe side"

C. Income should be equal to or higher than expenses

Which of the following is NOT a way to combat procrastination ? A. Don't expect perfection B. Set reasonable goals C. Leave the most difficult assignment until later D. Ask for help if you need it

C. Leave the most difficult assignment until later

Elle is given money for college because of her superior musical skills. Which type of financial aid does Elle receive ? A. Need-based aid B. Variable-rate loan C. Merit-based aid D. Fixed-rate loan

C. Merit-based aid

You won't pay a credit card company any interest if you: A. Only use your credit card three times each month B. Pay on time each month C. Pay your balance in full on time each month D. Pay the minimum required payment on time each month

C. Pay your balance in full on time each month

Jane is planning her monthly budget. Which item below belongs on the Estimated Monthly Income chart ? A. Revolving credit line on credit card B. Health insurance payment C. Rent money from roomate D. Car payment

C. Rent money from roommate

Which reason is the best one to explain why Sam opened a credit card that has a high interest rate ? A. Sam's friend has the same card, and he likes it B. The amount Sam can charge is higher than other cards C. Sam knows he can pay off the charges every month D. Sam can earn a free gym bag by opening the card

C. Sam knows he can pay off the charges every month

What is the definition of financial need ? A. The total amount you need to finance your education B. The amount of money your parents are willing to pay for your schooling C. The difference between the cost of college attendance and your family's ability to pay D. The amount of financial aid you are awarded

C. The difference between the cost of college attendance and your family's ability to pay

Jason's take home pay from his cashier job is less than the total amount he spends. He lives in an apartment and takes four online courses. He analyzed his budget and now is trying to reduce his expenses for next month. Which expense will most likely remain the same, in spite of his best efforts to reduce spending ? A. Donations B. Food C. Tuition D. Financial Aid

C. Tuition

Which question relates to setting a long-term financial goal ? A. How much does it cost to buy a movie ticket and snacks at the theater? B. What is the late payment fee on my car loan? C. When would I like to buy a new car? D. On which day of the month is my credit card bill sent out?

C. When would I like to buy a new car?

What type of financial aid is NOT used to pay a student's tuition bill directly ? A. Grants B. Scholarships C. Work Study D. Tuition Reimbursement

C. Work Study You earn this type of aid by working for the school. How much you earn depends on how much you work.

Robert is planning a monthly budget. Which statement describes the first step he should take in this process ? A. Do not worry to much about the little expenditures for coffee and new songs for the iPod B. Figure out how much he needs for entertainment and budget accordingly C. Write down what he spent over a month or week D. Check out how much he has in savings

C. Write down what he spent over a month or week

By creating a daily To-Do list and prioritizing it thoughtfully what does it help you become more aware of ?

Changes to your original plans, when you are procrastinating, and tasks that take more or less time than you thought.

In the Entertainment category, which expense would be most effective for Alberto to consider adjusting first to help meet his budget goals ? A. Eating out B. Downloads/Netflix/HBO C. Movies/Concerts/Clubs D. All of the above

D. All of the above All of these are good choices because that are simple ways for Alberto to cut back on spending on "wants" rather than "needs".

What is a Student Aid Report ? A. A financial aid reward that must be paid back B. A financial aid that does not need to be repaid C. An application for federal financial aid D. An explanation of eligibility for federal financial aid

D. An explanation of eligibility

Yoshi is taking several writing, history, and business courses on campus this term and has to turn in two essays and a draft of a fiction short story next week. He needs supplies but is short on money. While shopping, he looks at four items each costs about $25.00. He knows that he should buy the most necessary item. A. A pair of flip-flops in the school colors and with the school logo on them B. The hardback copy of the latest book in his favorite sci-fi series C. A card reader to transfer photos from his phone to his computer D. An ink cartridge for his printer

D. An ink cartridge for his printer

What can credit card users do to prevent identity theft ? A. Use the same passwords for all accounts B. Throw away duplicates of credit cards C. File all unsolicited credit card offers D. Be sure online shopping sites are legitimate

D. Be sure online shopping sites are legitimate

Which budget category is the best place to start when adjusting Alberto's budget to reduce his expenses? A. Home B. Health Care C. Credit Card D. Food/Entertainment

D. Food/Entertainment Although there may be ways for Alberto to reduce his spending in other categories, the best place to start would be the Entertainment category.

Sam has a part-time job delivering pizzas. Which automobile expense is the most necessary purchase for him ? A. Roof-top cargo carrier B. Heated cushions for the seat and seat back C. Adapter so he can use his MP3 player in the car D. Hands-free navigation capability

D. Hands-free navigation capability

Which strategy is most useful when trying to reduce the use of credit ? A. Always pay the minimum on your credit card balance B. Only use credit for wants as opposed to needs C. Understand the terms of credit and avoid late fees D. Pay off what you owe each month and save for big expenditures

D. Pay off what you owe each month and save for big expenditures

Wise consumers of credit try to avoid which behavior ? A. Using credit sparingly B. Paying on time to avoid late fees C. Putting aside cash each month for "wants" and staying within budget D. Paying only the minimum payments on their credit cards

D. Paying only the minimum payments on their credit cards

An example of this chapter's habit - anticipate - would be: A. Having coffee with friends instead of attending a study group B. Speeding to campus so you will not be late for class C. Deciding to go shopping before paying your bills D. Planning several study sessions a week before a major test

D. Planning several study sessions a week before a major test

Which option best describes an effective budget analysis ? A. Actual expenses are compared to projected expenses and income B. Projected expenses are compared to projected income C. Actual expenses are compared to actual income D. Projected expenses and income are compared to actual expenses and income

D. Projected expenses and income are compared to actual expenses and income

Which strategy will help Jenny to successfully manage her money ? A. Move to a cheaper apartment B. Limit spending to food, shelter, and clothing C. Either spend more or earn less than the budget plan D. Reduce or cut purchases that she does not need to make

D. Reduce or cut purchases that she does not need to make

When managing credit wisely, what strategy is usually considered best ? A. Do not worry about small purchases B. Put large purchases on a credit card if you cannot afford them. C. Pay the minimum ammount each month until the card is paid off D. Reduce the balance on the credit card as quickly as possible

D. Reduce the balance on the credit card as quickly as possible

A student filled out the FAFSA. Then, he received a document sent by the government that estimated the amount of money he and his family would need to pay for college the next year. What is the acronym for that document ? A. EFC B. SSN C. GPA D. SAR

D. SAR

When Maria started to plan her monthly budget, she realized that her membership dues occurred only once each year. How should these expenses fit into her monthly budget ? A. She should put the dues on her credit card and spread the payments over the year B. She should not include the dues in her monthly budget C. Each year she should withdraw money from her savings account to pay the dues D. She should divide the dues by 12 and add that amount into monthly expenses.

D. She should divide the dues by 12 and add that amount into monthly expenses

Which credit card condition has the greatest effect on a person's ability to reduce debt ? A. Minimum payments B. Automated payments C. The payment date D. The interest rate

D. The interest rate

Time management is: A. Unnecessary if you are only responsible for yourself B. A skill that is rarely appreciated in the job market C. Overwhelming if you do not have an electronic planner D. The process of making careful decisions about how to spend your time

D. The process of making careful decisions about how to spend your timeq

Planners - whether electronic or hard copy - are essential for college students because: A. Professors are impressed if you have one B. Many new electronic devices provide multiple services C. They don't take up much space and are easy to carry with you D. They help you keep track of your commitments, plans and priorities

D. They help you keep track of your commitments, plans and priorities

Why is it important for Bill to compare his estimated budget with his actual budget ? A. To practice his budgeting skills B. To show his parents that he is responsible with money C. To determine whether he needs to borrow on credit D. To make sure his estimates are realistic

D. To make sure his estimates are realistic

What option describes a good reason for Travis to monitor his expenses for a month ? A. To calculate at what age he can retire B. To evaluate how much time he spends on school work C. To see if he will qualify for government aid D. To make sure his income exceeds his expenses

D. To make sure his income exceeds his expenses

What is the difference between subsidized and unsubsidized loans ? A. What criteria is required B. How much money is given C. Whether they need to be repaid D. When interest charges begin

D. When interest charges begin

The switching time that it takes your brain to switch from one activity to another has no effect on how long it takes you to complete your tasks. ( True or False )

False

Your values and culture don't affect who you are as a money manager. ( True or False )

False

What are expenses ?

How much money you spend.

What is income ?

How much money you take in.

Why is using a to-do list effective to use everyday ?

It allows you to see and prioritize what needs to be done.

What is procrastinating ?

The act of putting of a task until another time.

What is an expenditure ?

The action of spending funds, an amount of money spent.

What should you know about your loans ?

The interest rate, how long you have to repay the loan, and whether your loan is subsidized or unsubsidized.`

What is a Personal Time Profile ?

The unique way a person deals with time.

With government loans you are often able to defer from making payments while you're in school, what does this mean ?

This means that you don't have to make payments until you graduate or leave school.

While it is important to make long term goals why is it just as important to make daily and weekly goals ?

This way you can keep your mind focused on what's important to accomplish in the short term which also keeps you on track for your long term goals.

What are the best types of aid ?

Those that you do not have to repay, scholarships and grants.

What does it mean to Prioritize ?

To arrange or deal with tasks in order of importance.

Breaking a task down into smaller, more reasonable steps can help you avoid procrastinating. ( True or False )

True

Cutting back on regular daily expenses can make a significant difference in your budget. ( True or False )

True

Entering key dates from your course syllabi - test and quiz dates, assignment due dates - in your planner can help you mange your schedule by allowing you to see commitments ahead of time. ( True or False )

True

What would be most useful when backwards planning regarding your college class ?

Your syllabus.

Government loans usually have a _____ rate of interest compared to private loans.

lower