Personal Finance (Chapter 1 - 6, 7 not included)
Credit card
A card issued by a bank that allows users to finance a purchase
Zero-based budget
A cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero
The risk of your not repaying debt
A credit score is intended to measure: A) Your financial success B) The risk of your not repaying debt C) Your income level D) The amount of money you have in the bank
Lease
A long-term rental agreement on a car
Personal finance
All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.
Trade school
Allows students to learn basic professional skills in two years or less
All of the above
For which of the following should you save? A) Purchases B) Wealth building C) Emergency fund D) All of the above
Personal selling, financing, repetition, product positioning
Four common marketing tactics are: A) Repetition, buyer's remorse, product positioning, significant purchase B) Competition, financing, opportunity cost, personal selling C) Branding, personal selling, opportunity cost, financing D) Personal selling, financing, repetition, product positioning
Brand recognition
Refers to the public's ability to recall and recognize a brand by its logo, jingles, packaging, etc
False
True or False: If you write a zero-based budget every month, it is not necessary to reconcile your account
False
True or False: Learning the language of money is not that important because you will be able to depend on financial planners to manage your money
False
True or False: Most Americans avoid the use of credit when it comes to buying big-ticket items like a car or furniture for their home.
False
True or False: Most Americans today are wealthy and will have financial security when they retire
True
True or False: Never buy something you don't understand
True
True or False: Online bill pay allows you to make payments to whomever you wish without having to write a check and send it in the mail
True
True or False: Our culture thinks student loan debt is normal and that it's an acceptable way to pay for college
False
True or False: Since you are a teenager, what you do now with money will have little effect on your financial future.
True
True or False: Teens are a huge target of credit card companies today
True
True or False: The academic and financial choices you make in the next few years will affect the next 40 years of your life.
False
True or False: The amount of stuff a person has is directly related to contentment and happiness
True
True or False: The average millionaire reads one nonfiction book a month
False
True or False: The best quality colleges are always the most expensive
True
True or False: The envelope system works great for managing spending on things that don't normally have a fixed monthly expense
False
True or False: The first thing you should save for is your retirement fund
True
True or False: The number-one cause of divorce in North America today is stress and disagreements over money
True
True or False: There are three credit bureaus: Experian, TransUnion, and Equifax
Community college
A two-year government-supported college that offers an associate's degree
Budget
A written cash flow plan
They offer better prices with guarantees, stretch the truth a little to convince you, and are friendly
Identify ways companies compete for your money
Media
Identify which method companies are using to compete for you money: TV commercials A) Personal selling B) Financing C) Media D) Product positioning
Financing
Identify which method companies are using to compete for your money: "90-days-same-as-cash" A) Personal selling B) Financing C) Media D) Product positioning
Finanical literacy
The knowledge and skill set necessary to be an informed consumer and manage finances effectively
Inflation
The persistent increase in the cost of goods and services or the persistent decline in the buying power of money
Product positioning
The process of communicating the value of a product or service to customers
Branding
The promotion of a product or service by identifying it with distinct characteristics;
All of the above
The purpose of advertising is to: A) Tease the consumer B) Inform the consumer C) Persuade the consumer D) All of the above
Reconcile
To match your bank statement with your checkbook
False
True or False: Inflation has no effect on your buying power
$400
Using the sinking fund approach, how much do you have to save each month to buy a $4,800 car one year from now? A) $400 B) $300 C) $275 D) $500
On-the-job training
Usually a professional trainer serves as the course instructor and uses a combination of hands-on activities and formal classroom training
Upside down
WHen a person owes more on an item than it is worth, the person is said to be ______ on the loan
Chantel's Answer (+2/2 points): People are lazy and don't keep up with them.
What are the reasons cash flow plans sometimes do not work?
Opportunity cost
What concept is best explained by the statement, "Money spent here cannot be spent there"? A) Law of diminishing return B) Opportunity cost C) Significant purchase D) Delayed gratification
Spending more money than you make and acquiring debt
What does it mean to have a negative savings rate? A) Saving for something that is a want instead of a need B) Having a fully funded emergency fund C) Having no savings at all D) Spending more money than you make and acquiring debt
The price may increase over time
What effect does inflation have on purchasing power?
- -
What excites you most about life after high school?
All of the above
What factors affect a credit score? A) Type of debt B) New debt C) Duration of debt D) All of the above
Compound interest
Interest paid on interest previously earned
False
True or False: If you are a victim of identity theft, you are only responsible for paying half of the debt
True
True or False: If you attend a community college for your first two years, you'll want to work closely with your advisor to make sure that the classes you take will trasfer to your four-year school of choice
False
True or False: It is okay to use a credit card if you pay it off every month
True
True or False: The Federal Trade Commission (FTC) is one of many U.S. federal agencies that regulate the consumer credit system and enforce the laws related to it.
True
True or False: The credit system today is structured to accommodate a state of uncertain employment and income instability, utilizing high-interest rates and fees to turn huge profits
True
True or False: True financial security is achieved when your money begins to generate an income - your money starts working for you
False
True or False: Under the Fair Credit Reporting Act (FCRA), any person or organization may check a person's credit information without having a legitimate need
True
True or False: When developing a personal financial plan, one of the first things you should do is assess your current financial situation. This includes your income, assets, and liabilities
False
True or False: When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done.
False
True or False: When shopping for the best education option, you should narrow down your choice of colleges to 10 schools or less
True
True or False: When you're in high school, you won't have the same emergency expenses as your parents
True
True or False: When you're older and out of school, you'll need to grow your emergency fund into a full three to six months' worth of expenses
True
True or False: Writing and following a zero-based budget will help you avoid overspending and impulse purchases
True
True or False: You can and should obtain a free copy of your credit report annually in order to check for any suspicious activity.
False
True or False: You must establish credit in order to buy a house
False
True or False: You must go to a prestigious school in order for employers to recognize your talents and strengths
True
True or False: You must shop for the best price for your education in the saem way you comparison shiop for any large purchase
False
True or False: You need to have a credit card to rent a car or check in to a hotel
False
True or False: You should keep your emergency fund in the same account as your spending money
False
True or False: You should never wait overnight before making a big purchase if there is only one item left
True
True or False: You should save money for three basic reasons: Emergency fund, Purchases, and Wealth building
False
True or False: You'll only need to complete the FAFSA once during your college education
False
Repetition has proven to be an ineffective marketing technique
True
True or False: Having debt keeps you from building wealth
Loan
A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment
Credit report
A detailed report of an individual's credit history
Interest
A fee paid by a borrower to the lender for the use of borrowed money
Grant
A form of federal or state financial aid that does not need to be repaid; usually given to students who demonstrate financial need
Scholarship
A form of financial aid that does not need to be repaid
FAFSA
A form that is completed annually by current and prospective college students to determine their eligibility for financial aid
Recession
A period of temporary economic decline during which trade and industrial activity are reduced; generally identified by a fall in gross domestic product (GDP)
Loan shark
A person or business that offers loans at extremely high interest rates
Consumer
A person or organization that uses a product or service
Entrepreneur
A person that starts his or her own business
Work study
A program that allows students to work part time while continuing their studies
Impulse buy
A spur-of-the-moment, unplanned decision to buy a product or service
Cash flow statement
A summary of all the income and outgo over a certain time period
Economy
A system by which goods and services are produced and distributed
Finding the most expensive, prestigious college so that you can impress future employers
A wise college plan does not include: A) Creating a budget and starting to save now B) Shopping around for the most appropriate, low-cost academic option for your career choice C) Scoring well on the ACT or SAT D) Finding the most expensive, prestigious college so that you can impress future employers
All of the above
A written budget, if followed, removes ___________ from your finances A) Overspending B) Guilt C) Management by crisis D) All of the above
Capitalism
AN economic system based on a free market, profit motive, open competition, and private ownership of the means of production
False
Americans typically maintains a very high savings rate
Significant purchase
An amount of money you spend, usually $300
Introductory rate
An interest rate charged to a customer during the early stages of a loan
Impulse purchase
An item that is bought without previous planning or consideration of the long-term effects
Debt
An obligation of repayment owed by one party to a second party
It robs you from you future and ties you down where you can't get up until it's paid off
Describe the negative consequences of taking on debt. What effect can debt have on your future?
Checks, debit cards, mobile banking, etc
Describe the various payment options that come with a checking account.
Mary's Answer (+5 points): No, budget your fun money in too!
Does managing your money well mean that you can't have fun with your money?
- -
Does the "history of credit and consumerism" segment make you view the use of credit differently than you did before? Explain your answer
Make overspending more likely
Doing a budget does not: A) Show if you are overspending in an area B) Make overspending more likely C) Remove guilt and shame sometimes associated with a purchase D) Make your money go further
Consumer credit could be profitable
During the Great Depression, New Deal policymakers came up with mortgage (home loans) and consumer lending policies that convinced commercial banks that: A) Consumers would not be willing to use credit, since borrowing money for large purchases had not previously been an option for the middle class B) They would not be able to compete with loan sharks in the industry of consumer lending C) Consumer credit could be profitable D) Consumer credit was not a profitable industry
Discretionary expense
Eating out: A) Fixed expense B) Variable expense C) Discretionary expense D) Intermittent expense
Friends, media, billboards, celebrities, shows, etc
Summarize factors that influence consumer decisions
True
Teens have cited "friends" as the strongest influence over their purchase decisions
Pay cash for college
The Fourth Foundation is: A) Pay cash for your car B) Build wealth and give C) Build a $500 emergency fund D) Pay cash for college
10 years
The average repayment period for a student loan is: A) 15 years B) 5 years C) 20 years D) 10 years
False
True or False: Everyone should have the same financial plan. A budget that works for one person should be sufficient for everyone.
False
True or False: Expensive houses and new cars are a true indication of wealth
True
True or False: Young single adults should find an accountability partner with whom to discuss big purchases
False
True or False: Your income level greatly affects your saving habits
Have money available to lend to friends
Which of the following is not one of the three basic reasons for saving money? A) Emergency fund B) Large purchases C) Have money available to lend to friends D) Build wealth
Inflation
The persistent rise in the cost of goods and services
Check register
Your own record of all your transactions
Sinking fund
Saving money over time for a large purchase
$500
At your age, a fully funded emergency fund should be: A) $500 B) $5,000 C) $100 D) $1,000
- -
Based on what you've learned, do you feel it is realistic to graduate debt free? Why or why not?
Intermittent expense
Car repairs are a: A) Fixed expense B) Variable expense C) Discretionary expense D) Intermittent expense
Savings rate
Compares after-tax income to the money people spend on a variety of items
Annual percentage rate (APR)
Cost of borrowing money on an annual basis
Opportunity cost/"be backs" in the car business
Dave tells us a story of a man who bought his dream car, drove it home, but then returned it the next day after some money calculations. This story is an example of: A) Brand recognition B) "Be backs" in the car business C) Buyer's remorse D) Opportunity cost
A water heater blowing up, ACT tests, emergencies, etc
Describe some changes in circumstances that might affect a personal budget.
Mary's Answer (+5 points): Rely on credit; live paycheck to paycheck; thinking debt is normal
Describe some of the mistakes Americans often make when it comes to money.
Secured = Collateral; Unsecured = No collateral
Describe the difference between a secured and unsecured loan
Fixed
Expenses that remain the same from month to month
- -
Explain how academic and financial decisions made today will affect your life for years to come
Mary's Answer (+4 points): You might want to splurge on things you don't need; Buy now, pay later.
Explain how marketing can affect your decisions when it comes to spending money.
You pay off your smallest debt first and after that's paid, you add that to your next one
Explain how the debt snowball works
Apply for as many scholarships/grants as possible. FIll out your FAFSA ASAP. Work during the summer and during college. Avoid student loans
Explain how you can get an education debt free
You can hide it, but it's still there starving for food (Debt)
Explain why Dave compares student loan debt to a "Monster locked in the closet"
It goes up or down
Explain why an adjustable rate mortgage (ARM) is a bad idea
If you are aware, then you are more in control of your finances
Explain why consumer awareness is such an important part of a healthy financial plan
In case of an emergency, you'll need that first
Explain why establishing an emergency fund should be your first savings priority before large purchases and wealth building.
You pay more than it's worth
Explain why financing a car is a bad idea
You might regret it later. Save up for something you actually want/need instead of using credit for something you might regret later
Explain why financing a purchase is a bad idea
Mary's Answer (+2/2 points): Because you need to know where everything is going. You can't just take one online randomly, because everyone's is different
Explain why it's important to develop a personalized financial plan for spending, saving, and record keeping
You must know if you are a saver/spender. Do you control your money or does it control you?
Explain why understanding your money personality is important when it comes to developing a money plan that's right for you.
Mary's Answer (+2/2 points): So that you control your money
Explain why you should always have a cash flow plan.
Buyer's remorse
Feeling regret or concern after making a large purchase
Variable expense
Groceries are a: A) Fixed expense B) Variable expense C) Discretionary expense D) Intermittent expense
False
Having more than one bank account i snever a good idea since it can complicate money management
Personal Selling
Identify which method companies are using to compete for your money: Car salesman A) Personal selling B) Financing C) Media D) Product positioning
Product positioning
Identify which method companies are using to compete for your money: Reputation for holding its value A) Personal selling B) Financing C) Media D) Product positioning
A & B
If you do not have a FICO score, what factors will determine whether or not you qualify for a mortgage? A) History of rental and utility payments B) AMount of your down payment and employment history C) You cannot get a mortgage without a credit history D) A & B
10 years
Individual account information is removed from your credit report seven years after the last activity on the account, except for Chapter 7 bankruptcy, which stays on your credit report for: A) 1 year B) 10 years C) 5 years D) 20 years
Sinking fund
Instead of borrowing money for large purchases, you should set money aside in a ________ over time and pay with cash. A) Emergency fund B) Sinking fund C) Credit card fund D) Mortgage fund
Allow your financial planner to make all of your major money decisions
Key components of financial planning include all of the following except: A) Write out a detailed plan for accomplishing your goals B) Replace money myths with money truths C) Allow your financial planner to make all of your major money decisions D) Regularly monitor and reassess your financial plan
!) $500 emergency fund, 2) get out of debt, 3) Pay cash for your car, 4) Pay cash for college, and 5) Build wealth and give; #1. Saving for your emergency fund through odd jobs. #2. Save up and pay off all your debt and avoid going into debt again by destroying your credit card. #3. Save up car money in a sinking fund. #4. Apply for scholarships and grants and save up while you're young. #5. Save more to build your wealth and give to charities.
List and describe each of the Five Foundations
Emergency fund
Money set aside and left alone for a "rainy day"
Time value of money
Money today has different buying power than the same amount of money in the future
Discretionary
Non-essential expenses
Overdraft
Occurs when money is withdrawn from a bank account and the available balance goes below zero
Cash-flow
Pay as you go
70
Percentage of Americans living paycheck to paycheck: A) 70 B) 25 C) 50 D) 40
66%
Percentage of college students that graduate with student loans: A) 90% B) 66% C) 30% D) 25%
Interest rate
Percentage paid to a lender for the use of borrowed money, or the percentage earned on invested principal
Managing your money behavior
Personal financial success is primarily the result of: A) Managing your money behavior B) Winning the lottery C) Generous welfare and unemployment programs D) Inheriting money from your parents
Debt snowball
Preferred method of debt repayment
Opportunity cost
Refers to the financial opportunity that is given up because you choose to do something else with your money
Fixed expense
Rent is a: A) Fixed expense B) Variable expense C) Discretionary expense D) Intermittent expense
- -
Review the Chapter 1, Section 2 segment titled, "What's Your Money Personality?" Which of the four student responses most matches your view of money?: Frustration - Many teens expressed negative emotions about money: anger, frustration, stress, distrust, and even hatred... Role Models - Teens are watching how their parents treat money. In several of the essays, the teens made a point to criticize how their parents handle money and vowed not to "be like them"... Pragmatic - There was a minority voice that did approach the topic with a more pragmatic point of view and in some rarer cases, even positivity. Students shared their personal saving tips, budgeting experience and more... Money Isn't Everything - A good percentage of the essays address a more universal truth: money isn't everything. Yes, it's needed to survive, but it's not a requirement in making people happy.
Mary's Answer (+5 points): They were more grateful for what they have. 58% say they were less greedy. Some were more appreciative.
Review the sidebar content in Chapter 1, Section 2 titled, "Teen money attitudes shifted with the recent recession." Write a paragraph summarizing the ways in which teen attitudes toward money, work and family changed during the recent recession: Teen money attitudes shifted with the most recent recession. - Nine in 10 teens say they were affected by the recession - Nearly two-thirds of teens (64%) are more grateful for what they have. - The majority (58%) of teens say they are less likely to ask for things they want. - The majority (56%) of teens have a greater appreciation for their parents' hard work. - More than a third (39%) of teens appreciate their families more. - Nearly three-quarters (73%) of teens say it is important to have an emergency fund. - More than half (51%) of teens say it is important to understand debt.
Envelope system
SEries of envelopes that are divided into categories and are used to store cash for planned monthly expenses
The First Foundation
Save a $500 emergency fund
Contentment and emotion
Saving is about: A) Contentment and emotion B) Contentment and earning more money C) Making more money and discipline D) Pride and greed
A woman co-signed for her ex and it made her have to work 80 hours a week and ruined her relationships
Select a case study out of this chapter and describe the effect of student loan debt had on that person's life.
True
Setting up automatic account transfers i sthe easiest way to build your savings for your emergency fund or large purchases
Five Foundations
The five steps to financial success
Budgeting with an irregular income is no different than budgeting with a regular income
The following are guidelines for budgeting with an irregular income except: A) Prioritize the list in order of importance B) Make a list of all of your expenses for the month ahead C) Budgeting with an irregular income is no different than budgeting with a regular income D) When your check comes in, spend your money all the way down the list
Credit
The granting of a loan and the creation of debt; any form of deferred payment
Both A & C
The saving habits of Ben and Arthur best illustrate which principle of saving? A) The length of time money is invested matters B) The amount of the initial investment is the key C) Rate of return matters D) Both A & C
$1 trillion
The total estimated student loan debt outstanding (unpaid) is over: A) $1 trillion B) $10 thousand C) $7 trillion D) $1 billion
The saving rate of Americans is low and many borrow in order to spend more than they earn
The widespread financial insecurity of Americans is primarily because: A) The incomes of Americans are low B) The saving rate of Americans is low and many borrow in order to spend more than they earn C) Government programs are unavailable to help people when they are disabled or experience unemployment D) Most Americans save a high proportion of their income
The zero-based budget ensures that every dollar you make is assigned a specific purpose
The zero-based budget is the best method of budgeting because: A) This type of budget is less complicated than other types of budgets B) A zero-based budget allows less money for wants C) Sticking to a zero-based budget requires less discipline D) The zero-based budget ensures that every dollar you make is assigned a specific purpose
Certifications
These may be free or low-cost; found online, at community colleges, or through government-funded programs
Time value of money
This principle suggests that a certain amount of money today has different buying power than the same amount of money in the future. This is due to both the opportunity to earn interest on the money and because inflation will drive prices us, thereby changing the "value" of the money A) Opportunity cost B) Time value of money C) Interest rate D) Inflation
Loan term
Time frame that a loan agreement is in force, and before or at the end of which the term should either be repaid or renegotiated
Financing
To buy an item with credit
True
True or False: "Pay Yourself First" means you should assign a portion of your income to saving and investing every month.
True
True or False: A budget has little effect on a person's financial success unless he or she also develops power over purchase
False
True or False: A debit card cannot be used for online purchases
False
True or False: A four-year degree is necessary regardless of which career you're entering
True
True or False: A good salesperson will answer a question with a question
True
True or False: An interest-bearing account is an account that generates interest income on the available balance in the account
True
True or False: Budgeting is crucial to your financial success
False
True or False: Co-signing a loan is a good way to help a friend or relative
Don't save passwords on public devices. Never give out your Social Security Number to anyone. Be careful with what you do online.
What are some things you can do to protect your personal information?
Time, Behavior, and Budgetting
What are the essential elements of wealth building?
Wait overnight, seek wise counsel, consider the opportunity cost, consider your buying motives, never buy anything you don't understand
What are the five steps you should take before making a significant purchase?
All of the above
What is a safe assumption to make regarding companies and their marketing practices? A) COmpanies know that competition is fierce for consumer dollars B) Companies spend millions of dollars and do extensive research on advertising C) Companies use all angles to aggressively compete for your money D) All of the above
A court-ordered attachment that allows a lender to take monies owed directly from a borrower's paycheck
What is paycheck garnishment? A) A court-ordered attachment that allows a lender to take monies owed directly from a borrower's paycheck B) Process of taking something back for failure to make payments C) Process by which the holder of a mortgage sells the property of a homeowner who has fallen behind on payment D) A legal procedure for dealing with debt problems of individuals and businesses
$500 emergency fund: your expenses will change as you get older
What is the First Foundation? Explain how and why the dollar amount will change as you get older.
Contact the police department and your card handler and make sure no one can access our account
What should you do if you think you are a victim of identity theft?
Time and Interest
What two things do you consider when evaluating the time value of money?
The cost of the financing is built into the price of the item
When a company places an ad and offers no interest on your purchase for three years: A) They are not interested in making a profit B) They are showing their appreciation to you by giving you free money C) The cost of the financing is built into the price of an item D) All of the above
Wealth building
When a person intentionally invests money in a place where it can earn more money
20, 80
When it comes to managing money, success is about _______% knowledge and _______% behavior
Behavior
When it comes to personal finance, the math is easy. What's challenging is managing your _____ A) Income B) Friends C) Bank account D) Behavior
Compare your purchase with a friend's
Which is not a "power over purchase" tactic? A) Compare your purchase with a friend's B) Consider the opportunity cost C) Wait overnight D) Seek counsel
Your own account register
Which of the following account records would have the most current balance? A) Account balance statement from the ATM B) Your own account register C) Your monthly bank statement D) All of these records will have accurate account balances
All of the above
Which of the following are ways that you can invest in yourself? A) Find a mentor B) Surround yourself with people who have similar goals and ambitions as you C) Read books D) All of the above
Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future
Which of the following best explains why students should learn about personal finance? A) Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future B) Personal finance skills are better learned through trial and error C) Personal finance skills are highly complex and require a great deal of time to learn. D) Learning to manage money will help you achieve a profitable career
Stick to your budget unless something unexpected happens
Which of the following is not one of the basics of budgeting? A) Pay yourself first by saving B) Stick to your budget unless something unexpected happens C) Make it a priority to give D) Live on less than you make
Studies show that consumers typically spend more when using credit as opposed to cash purchases
Which of the following best summarizes how the use of a credit card for purchases instead of cash can change one's spending behavior? A) Spending behavior does not matter as long as you pay off the credit card balance each month B) Studies show that there is no change in spending behavior whether a person uses cash or credit C) People typically spend less when they know they they are earning credit card "rewards" D) Studies show that consumers typically spend more when using credit as opposed to credit purchases
All of the above
Which of the following could be a negative consequence of taking out student loans? A) Not having the freedom to be a stay-at-home parent because of student loan payments B) Having to delay investing and saving for your future because of student loan payments C) Not having flexibility in your career options because of student loan payments D) All of the above
The credit industry in America has not changed much since 1917
Which of the following is NOT a true statement? A) Americans learned to borrow amidst post-WWII prosperity B) The credit industry in America has not changed much since 1917 C) After 1970, consumer debt skyrocketed D) As banks made higher profits they were willing to lend more money to consumers
All of the above
Which of the following is a consequence of overdrawing your checking account? A) Bounced check fee from the store B) Stress from money mismanagement C) Overdraft fee from your bank D) All of the above
All of the above
Which of the following is a consequence of spending more than you make? A) Missed opportunity to save and invest B) Stress C) A cycle of debt D) All of the above
All of the above
Which of the following is a reason that people don't save money? A) They lack discipline B) They do not live on a budget C) They lack focus D) All of the above
All of the above
Which of the following is a sign that your identity may have been stolen? A) A call from a collection agency about a debt you didn't incur B) Bank and billing statement don't arrive on time C) Your credit report shows accounts you didn't open D) All of the above
Knowing your money personality allows you to excuse excessive spending because it is simply part of your nature
Which of the following is not a benefit of understanding your own money personality? A) Recognizing who you are allows you the opportunity to grow and learn B) Once you know your money personality, you can develop a financial plan that works for you C) Knwoing your money personality allows you to excuse excessive spending because it is simply part of your nature D) None of the above
Making the customer do product research
Which of the following is not a common marketing strategy? A) Providing financing options B) Repetition C) Making the customer do product research D) Personal selling
Borrowing money can have serious consequences and prevent you from building wealth
Which of the following is not a credit myth? A) The lottery and other forms of gambling will make you rich B) You have "arrived" financially once you get approved for a credit card C) Debt is a tool and should be used to create prosperity D) Borrowing money can have serious consequences and prevent you from building wealth
Learn how to read your credit card statements
Which of the following is not a factor in becoming money smart? A) Have knowledge of basic math B) Learn the language of money C) Manage your behavior with money D) Learn how to read your credit card statements
Paying cash for all purchases
Which of the following is not a factor in determining a FICO score? A) Getting a personal loan from a bank B) Using credit cards C) Paying cash for all purchases D) Taking out a mortgage on a house
Financing
Which of the following is not a form of product positioning? A) Shelf positioning B) Packaging and color C) Financing D) Brand recognition
Borrow money from your parents to pay for the debt
Which of the following is not a good idea for getting out of debt? A) Quit borrowing money B) Get a part-time job or work overtime C) Sell something D) Borrow money from your parents to pay for the debt
Ask your parents to take out a loan
Which of the following is not a good option when it comes to paying for your education? A) Plan ahead B) FIll out your FAFSA C) Ask your parents to take out a loan D) Get a part-time job
Eating out
Which of the following is not a need? A) Housing B) Eating out C) Utilities D) Food
The use of credit is not socially accepted in the United States
Which of the following is not a reason credit is marketed heavily to consumers in the United States? A) The credit industry has become extremely profitable B) There is strong consumer demand for big-ticket items C) Since 1920, credit laws in the United States have been relaxed in an attemt to create a mainstream alternative to loan sharks for the working class D) The use of credit is not socially accepted in the United States
So that your emergency fund savings can earn a lot of interest
Which of the following is not a reason your emergency fund should be kept in a separate savings account away from your spending money? A) So that you do not get your spending and saving money confused B) So that it is clear what money is only to be used for emergencies C) So that it is not too easy to access D) So that your emergency fund savings can earn a lot of interest
Explore new car dealerships for the best interest rate
Which of the following is not a recommended step in the Drive Free method of purchasing a car? A) Plan your purchase in advance using the sinking fund method of saving B) Place your savings in a mutual fund so that your money can make more money C) Start with an inexpensive car and gradually move up in car value as our savings increases D) Explore new car dealerships for the best interest rate
Customer service reconciles your account for you
Which of the following is not a record-keeping feature you could expect from your bank? A) A reconciliation sheet B) An account register C) Customer service reconciles your account for you D) A monthly account statement
Every extra dollar you get should be thrown at the largest debt
Which of the following is not recommended in the debt snowball method of getting out of debt? A) List your debts in order from smallest to largest balance and focus on paying the smallest debt off first B) Every extra dollar you get should be thrown at the largest debt first C) Attack your debt with intensity D) A legal procedure for dealing with debt problems of individuals and businesses
Attend an out-of-state school
Which of the following is not recommended when you are cash-flowing your college education? A) Live on a zero-based budget B) Attend an out-of-state school C) Work and save money over the summer months D) Make sure you have an emergency fund
Spend less money than he or she makes
Which of the following is something that typical millionaire would do? A) Lease a new car B) Spend less money than he or she makes C) Replace things that are not broken D) Carry debt
Save a $500 emergency fund
Which of the following is the First Foundation? A) Get out of debt B) Build wealth and give C) Save a $500 emergency fund D) Pay cash for your car
The most ideal way to buy a house is with 100% down; if that is not an option, you should get no more than a 15-year, fixed rate mortgage with a down payment of at least 10%
Which of the following is the most cost-effective option for purchasing a home? A) Get a 15-year mortgage with a 5% down payment B) Get a 30-year mortgage so that you can get the lowest possible payments C) The most ideal way to buy a house is with 100% down; if that is not an option, you should get no more than a 15-year, fixed rate mortgage with a down payment of at least 10% D) Get a 30-year mortgage with a 20% down payment
All of the above
Which of the following should you consider when making a significant purchase? A) Your buying motives B) If you can't pay with cash, don't buy it C) The opportunity cost D) All of the above
Scholarships are only for the highest academic achievers
Which of the following statements about college financial aid is false? A) Many businesses have scholarships for employee's children B) Grants are free country C) The Free Application for Federal Student Aid (FAFSA) is the first step to receiving any kind of financial aid D) Scholarships are only for the highest academic achievers
Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and feed continue to destroy our financial well-being
Which of the following statements best describes how Americans are being outsmarted by banks and other lenders? A) Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and feed continue to destroy our financial well-being B) We are taught that we can buy happiness C) Buying things on credit has become acceptable in our culture D) We are driven by consumerism
How much money a person makes does not dictate his or her spending and saving behavior
Which of the following statements best explains why income alone does not determine wealth? A) Investing is the only factor that contributes to wealth building B) Income alone does determine a person's wealth C) Only people who are natural savers can become wealthy D) How much money a person does not dictate his or her spending and saving behavior
A budget is meant to summarize the saving and spending that has taken place over the past year
Which of the following statements is false? A) A cash flow statement summarizes all of the income and outgo (spending) over a certain time period B) A budget is a written plan for saving and spending C) A budget is meant to summarize the saving and spending that has taken place over the past year D) The cash flow statement is reflective of what has already taken place
A student loan is an award
Which of the following statements is false? A) Millions of people can't afford to make their student loan payment every month B) Our culture accepts student loan debt as normal and sometimes even refers to it as good debt C) Debt is owing anything to anyone for any reason D) A student loan is an award
Students rarely drop out of college due to financial trouble
Which of the following statements is false? A) On-campus jobs may pay you directly or pay toward your tuition bill B) Research shows that students who work up to 20 hours a week have the highest grade point averages C) Research shows that working more than 20 hours a week may affect your grades negatively D) Students rarely drop out of college due to financial trouble
All high-paying careers require a four-year college degree
Which of the following statements is false? A) On-the-job training often combines a professional trainer, hands-on activities and formal classroom training B) Students who are looking to learn specific skills can look into free or low-cost certifications found online, at community colleges, or through government-funded programs C) An associate's degree is a two-year degree that can offer specialized training and a flexible schedule that allows you to work while you earn your degree D) All high-paying careers require a four-year college degree
Under FCRA, consumers are allowed to receive one free credit report every five years
Which of the following statements is false? A) Prior to the FCRA, consumers were unable to challenge errors in their credit reports B) Under FCRA, consumers are allowed to receive one free credit report every five years C) The U.S> Congress enacted the Fair Credit Reporting Act to address concerns over consumer credit report accuracy, privacy and fairness D) Under FCRA, creditors must notify consumers if they deny credit based on a credit report file, and they must also tell the consumer which of the three credit bureaus provided the report
Go into debt
Which of the following things cannot be done with a debit card but can be done with a credit card? A) Go into debt B) Rent a car C) Purchase something online D) Purchase an airline ticket
Your income
Which of these is not a key to saving money? A) Focus B) Making saving a habit and a priority C) Your income D) Discipline
Mary's Answer (+2/2 points): To be prepared in the future
Why do you need an emergency fund at your age?
All of the above
You should visit your college's financial aid office if: A) Your parents' financial situation has changed B) You have any problems with the financial aid application process C) A medical situation has come up D) All of the above
The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security
Why is having a fully funded emergency fund so important when it comes to your financial well-being? A) As long as you have a good-paying job, you really don't need an emergency fund B) The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security C) The purpose of an emergency fund is to have money set aside for large purchases, like vacations D) None of the above
They might mess up or screw you over
Why is it important to maintain a file of both paper and electronic financial records?
Mary's Answer (+2/2 points): Because every dollar has a specific place it's going
Why is the zero-based budget the best method of budgeting?
The emergency fund is not intended to grow wealth
Why should interest earned not be a factor with your emergency fund? A) Inflation can eat up the interest earned B) Interest-bearing accounts at banks earn a high rate of interest, therefore, interest is not a concern C) The emergency fund is not intended to grow wealth D) None of the above
Because you might want to use that money for something else
Why should you always consider the opportunity cost when making a significant purchase
All of the above
Why was the use of credit uncommon prior to 1917? A) Laws prevented lenders from charging high interest rates B) Borrowing money was generally not socially acceptable C) Lending money to others was not profitable D) All of the above
It robs you, causes stress, ruins relationships, etc
Write down three reasons you should avoid student loans
True
You should hold off on investing for retirement until you have college or other post-secondary education paid for.
All of the above
Your monthly budget should include: A) Variable expenses B) Discretionary expenses C) Fixed expenses D) All of the above
True
Zero percent financing is nothing more than a really good marketing technique
