FL #3

Which of the following is NOT a good budgeting principle

Never budget for entertainment

If you pay off your credit card in full each month, how much interest will you pay?

None

A good rule for borrowing is:

Only borrow for large things that go up in value or increase your ability to earn.

What are three things you can do to establish a credit history?

Open and maintain a bank account. Repay any debt promptly. Apply for a secured credit card.

What should you consider before you make a purchase, especially a big purchase?

Over time will it appreciate or depreciate? Is it a want or a need? Do research about the item.

What should you NOT do when buying a car?

Pay whatever the sticker price says.

Pay yourself first means:

Put some of your money into savings before you begin paying your expenses.

Consumer credit counseling services do all the following except:

Remove harmful information from your credit record

The National Do Not Call Registry will:

Remove you from telemarking lists.

Good Credit can be necessary for all of the following except.

Selling a car

Good Credit is necessary for all of the following except.

Selling a car.

A good way to limit credit card use is to:

Set a limit of $500.

The first thing you should do when you get a credit card is:

Sign it.

Which item might be cheaper in the summer?

Skis

Why is it important to know your "take home" pay to manage your personal finances?

So you can create a budget. So you don't spend more than you earn. So you will know how much money you will take home, after they take out taxes.

According to the website, which of the following is NOT a good way to clean up your credit?

Spend more than you earn.

According to the law, you can check your credit report for free once a year.

True

Criminals can use your bank account number to withdraw money from your account

True

Depreciation could SAVE you money when you buy a used car.

True

If you can only pay the minimum payment, if anything, on all of your bills you are headed toward credit trouble.

True

If you don't have enough money in your account when you write a check or authorize a debit, you will end up paying more money in fees.

True

If you get a credit card, make sure you don't spend more than you can pay off at the end of EACH month.

True

Money management helps you keep an eye on your income.

True

Money management provides security.

True

Most car purchases are an expense, not an investment.

True

A benefit of paying with _______ is that you don't have to worry about paying for it later.

cash

To "self provide" means:

doing things yourself instead of paying others to do them for you

Money management allows you to spend as much money as you want.

False

True or False: An "infomercial" provides more reliable information because there is more time to understand the product.

False

The advice to replace your high interest credit card debt with a consolidation loan can be good advice if

Get a loan that has lower interest charges.

If an item appreciates in value, it:

Goes up in value.

Compound interest

Helps you when are saving money.

It is usually appropriate to borrow for:

Home and education

Your credit score is a quick way for lenders to assess:

How risky you are as a potential borrower of their money.

Your credit rating determines:

If you can get a loan. How much interest you will pay on a loan. The size of your monthly payment on a loan.

Where is the most common place a store uses to increase "impulse purchases?"

In the checkout line.

Paying less each month on a credit card

Increases the overall interest you will pay.

The grace period for credit cards:

Is a period of no interest

Budgeting

Is a powerful tool for helping you obtain what you want with what you have.

Spending less than you earn leads to:

Less "paycheck-to-paycheck stress." Having savings for the things you need. A more enjoyable and sustainable lifestyle.

Which of the following will NOT help keep your credit secure from theft or fraud

Let only close relatives use your cards.

According to the website, how often should you balance your checkbook?

Monthly

Fixed expenses include:

Monthly house payments

Which is a good spending tip?

Ask yourself: Why am I buying this?

What is bankruptcy?

"A federal court process where you get the chance to eliminate or reorganize your debts through the sale of assets, or by following a repayment plan that will often last 5 years."

If your credit card is used without your authorization, how much are you responsible to pay?

$50

If you earn $1,000/mo., how much might you typically take home after taxes? (this is the amount I told you to save from the Lesson for the Quiz)

$811.70

From the website, most people typically make a partial down payment on the car they are buying. What is the percent most people put down?

10%

From the website, as a good rule of thumb, what percent should your housing expense be to your net income?

40% or lower.

How long can bankruptcy stay on your credit report?

7 to 10 years.

Define a revolving agreement:

A consumer pays in full each month or chooses to make a partial payment based on the outstanding balance.

Define a charge agreement:

A consumer promises to pay the full balance each month, so there are no interest charges.

Define an installment agreement:

A consumer signs a contract to repay a fixed amount of credit in equal payments over a specific period of time.

____________ works just like a checking account, but you don't have to fill anything out.

A debit card

When your choosing a credit card, the two things you should compare are:

APR and grace period

When referring to credit cards, APR stands for:

Annual Percentage Rate

If you were to spend fifteen dollars on a DVD, what is the opportunity cost of the fifteen dollars?

Anything else, on which you could have spent the fifteen dollars.

When buying a house, you should consider the other costs that go along with a house, such as:

Appliances Utilities Maintenance items

Bankruptcy does not eliminate the following debts

Back taxes Alimony/spousal support Student loans Child support

It takes time to balance your checking or debit statement. Why is is important for YOU to do this?

Banks sometimes make mistakes. It teaches you about the importance of saving money To make sure that no one is using your account without your knowledge.

Which one of the following is a BAD budgeting technique

Buying clothing items in season

Lenders partially determine the interest rate they will charge you by:

By examining your credit score.

To avoid identity theft, you should:

Check your credit once a year. Check your credit card statments monthly.

What should you NOT do if you are only making minimum credit card payments?

Continue to make minimum payments.

If you buy a brand new car, the moment you drive it off of the lot it will?

Depreciate

To be safe, what should you do before using a credit card online?

Do some research to make sure a company is legitimate.

A great spending truth is this:

Don't spend more than you earn!

Maxing out your credit may:

Eliminate your possibility for getting loans

Which one of the following is NOT one of the three main budget categories?

Entertainment expenses.

What are the three major credit bureaus?

Experian, Equifax, TransUnion

Which of the following is NOT a common way advertisers lure you to spend:

Tell out-right lies about products.

Why do you think advertisers say a product is "for a limited time only?"

To get you to their store promptly to spend money.

Debit cards and checkbooks use money from the same account. Which of the following is probably NOT an example of when a person might use a check?

To make an online purchase.

What does it mean to balance, or reconcile, your account?

To make sure that your records and the bank's records agree.

To keep your credit in check, you should pay all of your bills regularly and promptly.

True

True or False: An example of an impulse purchase would be buying 2 sweaters for the price of 1 when you went to the store to buy a pair of pants.

True

True or False: Credit is any form of borrowing money.

True

You should NOT give your account number and bank routing number to anyone you don't know

True

You should notify your bank immediately if you notice any mistakes in your account.

True

You shouldn't write a check or use your debit card for an amount that you don't have in your account.

True

Your "take home pay" is what you take home after taxes and other withholdings are taken out of your paycheck.

True

Your credit score is derived from how much you owe to others and how much credit you have available to you.

True

Your should check your credit report at least once a year.

True

Which is a tip that comes from advertisers?

Watch their happy faces when you give the very best.

Which of the following is NOT a benefit of home ownership?

You are helping your landlord buy a house.

An advantage of ATM cards (debit cards), is

You can withdraw funds electronically without going in debt.

Why does buying things on credit create a "false sense of ownership?"

You don't actually own the items until you have paid off your credit card.

What rule should you follow about giving your credit card number out over the phone?

You initiate the call and are sure the company is legitimate.

If you borrow to buy a car and the car is used as security for the loan ("collateral"), what will happen if you can't repay the loan?

Your car may get repossessed.

From the website, which of the following is NOT a consequence you could face for not paying your bills?

Your credit limit will be increased on your credit card.

Your credit history includes:

Your utility payments. Your rent payments. Your loan payments. All of these payments and more.

If you do NOT live "below your means, you:

are at risk for bankruptcy will probably go into debt. will likely feel constant stress about money

According to The Fair Debt Collection Practices Act, a collector can contact you:

by fax in person by mail by phone

The following are examples of someone headed toward credit trouble:

hey regularly pay their bills late, and "float" checks to cover bills. They continue to spend money rather than living within their means. They do not know how much debt they have at any given time. They use credit or loans to pay their bills.

When you only pay the minimum amount due on your cred card each month (i.e. only part of what you owe), you will:

pay interest, and therefore spend more for the items you purchased

Which of the following ways do advertisers lure you to spend:

prey upon your psychological needs for acceptance, happiness, and popularity help you confuse your wants with your needs deceive you into actually believing that you need their products.