What are The Five Foundations?

A personal financial action plan

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

where you are financially, how much income you have, what goals you set

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

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

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

Started to become more socially acceptable

As a single adult, you should . . .

Keep managing your money as a priority

FDR passed the New Deal because of the Great Depression in the 1930s. What was the purpose of this program?

To promote economic recovery and social reform

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

The Student Loan Marketing Association (SLMA)

what does living pay check to pay check mean?

Someone eagerly awaits their next paycheck to plan for the months expenses

Savers have a tendency to be . . .

Strict with their money and not spend any of it

What is financial literacy?

The knowledge /skill base necessary for people to manage own money

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

Earning, budgeting, saving, spending, and giving affect your money

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

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

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Tolentino_Dave Ramsey - Chapter 1

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Questions 30

Answers

1
An important money principle to consider is that you should _______ and _______ your money
Invest; lay out
Save; invest
Spend; invest
Invest; endow
2
You should always make sure you have a…
Budget
Credit card
Direct deposit
Credit line
3
To know your net worth, subtract your liabilities from your ?
Net income
Other liabilities
Assets
Previous net worth
4
Without any debt, you can be outrageously ?
Thrifty
Selfish
Generous
Cautious
5
If your assets total more than your liabilities, you will have a(n) net worth
Equal
Unknown
Positive
Negative
6
You are either only a natural saver or a natural spender. You cannot have a balance of both.
True
False
7
What is The Fifth Foundation?
Build wealth and give.
Find a financial professional
Pay cash for your car
.Get out and stay out of debt.
8
What are The Five Foundations?
A starting point for adults regarding finances
A starting point for adults regarding finances
A financial literacy technique
A personal financial action plan
9
Being a spender has many more positives than being a saver
False
True
10
To gain an understanding of your personal finances, you should know
Your financial goals
where you are financially, how much income you have, what goals you set
Your investment portfolio and your financial advisors’ contact information
How much income you have
11
It is possible to pay for college with cash.
False
True
12
When you set financial goals, they should be . . .
Specific and measurable
Only time-sensitive
Specific, measurable, time-sensitive, yours, and written
Timely, bank-based, specific, and yours
13
Your money personality impacts . . .
What you plan for as an adult
Your understanding of bank transactions
Your financial literacy level
How you handle money
14
Avoiding debt can lead to financial freedom and hope.
True
False
15
After WW I, the demand for products increased, and people began getting credit w/o loan sharks. Because of this, credit
Started to become more socially acceptable
Was offered at even higher interest rates by loan sharks
Increased so rapidly, loan sharks became obsolete
Was devalued in the marketplace
16
As a single adult, you should . . .
Have an accountability partner you trust somewhat
Beware of planned and budgeted buying
Keep managing your money as a priority
Have an accountability partner you trust somewhat
17
FDR passed the New Deal because of the Great Depression in the 1930s. What was the purpose of this program?
To promote economic recovery and social reform
To alleviate financial concerns with the United Nations
To create a borrowing system within the country
To divide the national budget in half and distribute it
18
A money principle to keep in mind is to live on _____ you make.
Exactly 20% below what
More than
The same as
Less than
19
A financial goal takes up to two years to reach.
Short-term
Long -Term
Five-level
Medium-term
20
What is The First Foundation?
Open a checking account
Save a $500 emergency fund
Build wealth and give
Pay cash for college
21
Personal finance is 20% and 80% .
Head knowledge; behavior
Cause; effect
Cause; effect
Cause; effect
22
Using credit has not always been a socially accepted practice, but it has become . . .
A practice used by the wealthy
Normal in American culture
Less acceptable
Necessary for life in America
23
In 1972, what association made borrowing money to attend college much easier than it had been?
The Student Federal Funding Association (SFFA)
The Student Loan Marketing Association (SLMA)
The Student Loan Approval Association (SLAA)
The Federal Student Approval Association (FSAA)
24
what does living pay check to pay check mean?
income is devoted to expenses which means little to no money in saving
Chooses not to deposit their paycheck, are living pay check to pay check.
Someone eagerly awaits their next paycheck to plan for the months expenses
Can't plan past the next paycheck due to financial/budgeting difficulties
25
Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.
False
True
26
Personal finance is all the financial decisions ? make in order to earn, budget, save, spend, and give money over time
Bank
Individual or company
Individual or family
Company or organization
27
Savers have a tendency to be . . .
Strict with only purchases for themselves
Strict with what they spend their money on, other than groceries
Strict with their money and not spend any of it
Strict with their purchases but spend money without a plan
28
What is financial literacy?
read financial documents for personal finance classes, goals, statements
The knowledge /skill base necessary for people to manage own money
The content provided in bank statements for consumers
curriculum provided to college students about finances for their degrees
29
Making the right choices with your money—managing your money—involves knowing how . . .
Earning, budgeting, saving, spending, and giving affect your money
make bank deposits using registers with the appropriate transactions listed
Planning, saving, spending, investing will define your financial portfolio
Consumer decisions will affect your accounts
30
What is the best way to avoid running out of money too quickly?
You can avoid making any purchases for the next 30 days.
You can make it a habit to plan and set goals for your money.
You can invest in college.
You can put your money in a safe place, like a bank, and not spend it.

Tolentino_Dave Ramsey - Chapter 1 Flashcards | StudBud