What is a "fixed expense" in a budget?

An expense that stays the same each month

Which budgeting approach is most likely to help someone who tends to overspend on impulse purchases?

Using only cash for non-essential spending

the money you earn after taxes are taken out

the cost of borrowing and reward for saving

Why are bonds a good investment?

They have a higher interest rate.

needs are expenses you cannot avoid, wants are optional

Where do banks get the money to lend out to consumers?

From their clients' savings accounts

The price paid for using someone else's money

How do banks make money off of the credit they issue?

They charge a high interest rate on the loan

putting your money to work earning more money

A debt investment; lending a company money and getting interest in return

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Personal Finance Prior-Knowledge

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Questions 22

Answers

1
What is a "fixed expense" in a budget?
An expense that changes each month
An expense that stays the same each month
An expense that only occurs once a year
An expense you can easily eliminate
2
Personal Finance is ....
80% behavior & 20% knowledge
Making it rain.
Letting people see you wop.
50% behavior & 50% knowledge
3
Which budgeting approach is most likely to help someone who tends to overspend on impulse purchases?
Automating all bill payments
Reviewing expenses at the end of each month
Using only cash for non-essential spending
Tracking expenses after each purchase
4
A budget is a plan for spending and saving your income.
True
False
5
what is net income
the money you earn before taxes
the money in my savings account
the money you earn after taxes are taken out
the interest you earn
6
Interest rates...
the cost of saving and reward for borrowing
The amount of foreign money you can get
the cost of borrowing and reward for saving
change every day
7
Why are bonds a good investment?
They have a higher interest rate.
They have a lower interest rate.
Its a safe loan used to buy things you cannot afford.
They could be lost or stolen
8
What is debt?
Money owed to others
Money that is found
Loaning people money
Money left over
9
_____ means having the knowledge and skills to manage your personal finances.
Interest
Financial literacy
Liability
Personal finance
10
Wants Vs. Needs = An example of a want is:
House
Hulu
Food
Sleep
11
needs vs wants
needs are paid for by the government, wants you pay yourself
needs are expenses you cannot avoid, wants are optional
needs are expenses for your entire family, wants are for you personally
needs are bills you have to pay, wants you are bills you are excited to pay
12
Where do banks get the money to lend out to consumers?
From their clients' credit card accounts
From their clients' savings accounts
From the Federal government
From their own money vaults
13
Why is financial literacy important?
to better understand credit scores, risk, interest rates
to know the basics of personal fiance and money management
All of the above
to understand how to build wealth
14
What is interest?
The price paid for using someone else's money
Dictates whether a bank will service you in any matter
A place to buy on credit
How much you like your money
15
How do banks make money off of the credit they issue?
They charge a large, one-time fee at the start of the loan
They take out a small fee each month from your checking acct
They charge a high interest rate on the loan
This is a trick question - they DON'T make money!
16
Investing means:
keeping your money safe
taking lots of risks not knowing the results
putting your money to work earning more money
saving your money
17
Why is building credit important?
To show financial responsibility
To qualify for a mortgage
All of the above
To get lower interest rates on loans
18
Building Credit is building financial reputation.
True
False
19
The amount a person earns before taxes are taken out is referred to as:
Adjusted Gross Income
Net Pay
Gross Income
Net Profit
20
Which of the following taxes is applied to wages, salaries, dividends, and interest earned?
Excise Tax
Corporate Income Tax
Income Tax
Estate Tax
21
What are examples of needs vs wants
money
toys
new devices
food,shelter,clothing
22
What is a bond?
A debt investment; lending a company money and getting interest in return
investments that are a mixture of stocks and bonds
A share of ownership in a company
An investment that requires a lot of money

Personal Finance Prior-Knowledge Flashcards | StudBud