What is the best way to avoid running out of money too quickly?

You can make it a habit to plan and set goalsfor your money.

To gain an understanding of your personal finances, you should know . . .

Where you stand financially (income, goals, and how you’ll reach them

What is financial literacy?

Knowledge/skill necessary for people to be smart consumers &manage finances

What does living paycheck to paycheck mean?

income is devoted to expenses and little to no money is put in savings

Making the right choices with your money—managing your money—involves knowing how . . .

Earning, budgeting, saving, spending, andgiving affect your money

After WWI, the demand for products increased, and people began getting credit w/out loan sharks. Because of this, credit

Started to become more socially acceptable

In 1972, what association made borrowing money to attend college much easier than it had been?

The Student Loan Marketing Association (SLMA)

Franklin Roosevelt passed the New Deal because of the Great Depression in the 30s. What was the purpose of this program

To promote economic recovery and socialreform

Savers have a tendency to be . . .

Strict with their money and not spend anyof it

What are The Five Foundations?

A personal financial action plan

As a single adult, you should . . .

Keep managing your money as a priority

When you set financial goals, they should be . . .

Specific, measurable, time-sensitive, yours,and written

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Financial Literacy Chapter 1

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Questions 30

Answers

1
What is The First Foundation?
Open a checking account.
Pay cash for college
Save a $500 emergency fund
Build wealth and give
2
Being a spender has many more positives than being a saver
True
False
3
A _____ financial goal takes up to two years to reach
Five-level
Medium-term
Long-term
Short-term
4
What is the best way to avoid running out of money too quickly?
You can make it a habit to plan and set goalsfor your money.
You can invest in college
You can put your money in a safe place, likea bank, and not spend it.
You can avoid making any purchases for thenext 30 days.
5
To gain an understanding of your personal finances, you should know . . .
How much income you have
Your investment portfolio and your financialadvisors’ contact information
Your financial goals
Where you stand financially (income, goals, and how you’ll reach them
6
What is financial literacy?
Knowledge/skill necessary for people to be smart consumers &manage finances
The skills to read financial documents
The content provided in bank statements for consumers
The curriculum provided to college studentsabout finances for their degrees
7
Avoiding debt can lead to financial freedom and hope
True
False
8
Using credit has not always been a socially accepted practice, but it has become . . .
Normal in American culture
A practice used by the wealthy
Necessary for life in America
Less acceptable
9
What does living paycheck to paycheck mean?
When a person chooses to not deposit their paycheck
someone eagerly awaits their next paycheck to plan for the month’s expenses
income is devoted to expenses and little to no money is put in savings
you cant plan past the next paycheck due to outside circumstances
10
Making the right choices with your money—managing your money—involves knowing how . . .
Planning, saving, spending,& investing will define your financial portfolio
Earning, budgeting, saving, spending, andgiving affect your money
Consumer decisions will affect youraccounts
To make bank deposits using registers w/the appropriate transactions listed
11
Personal finance is 20% ______ and 80% _____.
Behavior; head knowledge
Head knowledge; behavior
Cause; effect
Reactions; behaviors
12
An important money principle to consider is that you should __ and __ your money.
Spend; invest
Invest; endow
Save; invest
Invest; lay out
13
It is possible to pay for college with cash
False
True
14
After WWI, the demand for products increased, and people began getting credit w/out loan sharks. Because of this, credit
Increased so rapidly, loan sharks becameobsolete
Started to become more socially acceptable
Was devalued in the marketplace
Was offered at even higher interest rates byloan sharks
15
You should always make sure you have a…
Credit line
Budget
Direct deposit
Credit card
16
Your money personality impacts . . .
Your understanding of bank transactions
What you plan for as an adult
Your financial literacy level
How you handle money
17
In 1972, what association made borrowing money to attend college much easier than it had been?
The Federal Student Approval Association (FSAA)
The Student Federal Funding Association (SFFA)
The Student Loan Marketing Association (SLMA)
The Student Loan Approval Association (SLAA)
18
Personal finance is all the financial decisions a(n) ___ must make in order to earn, budget, save, spend, & give money
Individual or company
Bank
Company or organization
Individual or family
19
Franklin Roosevelt passed the New Deal because of the Great Depression in the 30s. What was the purpose of this program
To promote economic recovery and socialreform
To alleviate financial concerns with theUnited Nations
To create a borrowing system within thecountry
To divide the national budget in half anddistribute it
20
Savers have a tendency to be . . .
Strict with their purchases but spend money without a plan
Strict with what they spend their money on, other than groceries
Strict with only purchases for themselves
Strict with their money and not spend anyof it
21
You are either only a natural saver or a natural spender. You cannot have a balance of both
True
False
22
What are The Five Foundations?
A starting point for adults regarding finances
A personal financial action plan
A common conclusion for debt
A financial literacy technique
23
A money principle to keep in mind is to live on ___ you make.
Less than
Exactly 20% below what
More than
The same as
24
Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.
True
False
25
As a single adult, you should . . .
Seek a financial counselor or advisorby age 25
Have an accountability partner you trustsomewhat
Beware of planned and budgeted buying
Keep managing your money as a priority
26
To know your net worth, subtract your liabilities from your
Previous net worth
Assets
Net income
Other liabilities
27
If your assets total more than your liabilities, you will have a(n) net worth
Equal
Negative
Positive
Unknown
28
When you set financial goals, they should be . . .
Specific, measurable, time-sensitive, yours,and written
Timely, bank-based, specific, and yours
Only time-sensitive
Specific and measurable
29
Without any debt, you can be outrageously ____
Selfish
Cautious
Thrifty
Generous
30
What is The Fifth Foundation?
Build wealth and give.
Pay cash for your car.
Get out and stay out of debt.
Find a financial professional.

Financial Literacy Chapter 1 Flashcards | StudBud