Financial planning is important because it helps you to

reach financial goals and protect your assets

Financial planning helps individuals to

have strategies for saving and investing

U are short on cash each month. U always use credit cards to pay rent and buy food

Do a budget. Find ways to reduce expenses or increase income

A clear understanding of your personal values will

enable U to make choices that reflect what is important to U

The financial planning process

considers changing needs & goals in different stages of life

A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the

better off financially the person is.

In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should

reduce or eliminate some expenses

Discretionary income is

The difference between total income and living expenses

Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.

This shows the power of ads to create demand

Which of the following will help you the least in managing your money

getting advice from your friends

A stock broker or financial consultant

Gives financial advice to clients

It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that

the government imposes an excise tax on them.

Why hold an investment for over 1 year rather than selling it in less than a year

the capital gains will be taxed at a lower rate

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W!SE Review - Money Management Part 1

21 termsStudBud Administration2,134 plays

A review of Money Management concepts to prepare students for the W!SE Financial Literacy Exam

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Questions 21

Answers

1
Financial planning is important because it helps you to
eliminate risk on investments
reach financial goals and protect your assets
have higher expectations
achieve all personal goals
2
Financial planning helps individuals to
guarantee future income
eliminate risk on investments
achieve all goals by set target dates
have strategies for saving and investing
3
Spreading one's assets across several types of saving and investment products to manage risk is
Pooling
Diversification
Budgeting
Allocation
4
U are short on cash each month. U always use credit cards to pay rent and buy food
U must apply for additional credit cards
Do a budget. Find ways to reduce expenses or increase income
Ignore it. Things are bound to get better
U should borrow money from a relative
5
A clear understanding of your personal values will
cause anxiety as U make consumer and financial decisions
enable U to make choices that reflect what is important to U
encourage you to spend money on material goods
enable U to save effectively
6
The financial planning process
does not need to be revised for changing income and needs
guarantees that assets will increase
should not include lifetime goals
considers changing needs & goals in different stages of life
7
A term that best describes your gross pay after taxes are deducted is
assets
net worth
take-home pay
total revenues
8
A person's debt ratio shows the relationship between debt & net worth. The lower the ratio the
less liquid assets the person has.
more liquid assets the person has.
better off financially the person is.
worse off financially the person is.
9
In creating a budget, Ann realizes that her expenses exceed her income. Immediately she should
apply for a loan
open an IRA account
ignore her budget until she has more income
reduce or eliminate some expenses
10
You want to gain control over your income and spending so that you will be able to save money.
You should apply for a loan
You should develop a retirement plan
You should get advice from a friend
You should develop a budget
11
Money that is left over after paying taxes, fixed and other essential living expenses, is
Disposable income
Net pay
Net surplus
Play money
12
The following careers would be possible choices for someone interested in money and finance
Psychologist
Musician
Insurance actuary
Social worker
13
Discretionary income is
Wages plus investment income
A capital gain
The difference between total income and living expenses
Income that has been spent
14
Jane saw a breakfast cereal advertised on TV & insisted that her mother purchase this cereal.
This shows the power of ads to create demand
This is an example of ads failure to reach parents
This shows how ads focus on discouraging demand for products
This shows how all ad can make children misbehave
15
The following is usually considered a variable expense
mortgage payment
electric bill payment
rent payment
car payment
16
Something you are working to achieve within a defined period of time is
a dream
a goal
a value
an ideal
17
Which of the following will help you the least in managing your money
planning ahead for large expenses and resist impulse buying
setting goals and keeping a budget for your net income
paying your rent/mortgage payment and utility bills on time
getting advice from your friends
18
A stock broker or financial consultant
Sells money orders and certified checks
Gives financial advice to clients
Guarantees a return on investment
Does not have to be licensed
19
U budgeted $200 a month for clothing. This month U spent $150 on clothing. U have
a budget deficit.
an outflow deficit.
a budget variance.
an income overage.
20
It is expensive to be a smoker. One of the reasons cigarettes are so expensive is that
the government imposes an excise tax on them.
their cost is controlled by the Food and Drug Administration
Tobacco supply is controlled by the Federal Trade Commission
the tobacco industry imports most of the tobacco.
21
Why hold an investment for over 1 year rather than selling it in less than a year
Brokers will not charge any fees for selling the investment.
the capital gains will be taxed at a higher rate
money earned on the investment will be considered tax-free
the capital gains will be taxed at a lower rate

W!SE Review - Money Management Part 1 Flashcards | StudBud