Personal Finance: Chapter 2 (Pearson)

Which of the following is NOT one of the 7 key components addressed by a solid financial plan?

A financial plan is like a road map in that it helps you see how to get to the future you want for yourself.

For most U.S. consumers, the biggest expense is ___________.

Certain retirement & savings plans allow people to put off or avoid paying taxes on part of their income.

For U.S. consumers under 25 years of age, which of the following is the smallest annual expense?

In general, it is wise to rely on credit cards to cover cash shortfalls even if you cannot pay it off quickly.

In general, the higher your income, the higher the share of that income you will pay in income taxes.

Net worth is determined by subtracting your liabilities from your income.

Why do people invest money?

The age at which you begin retirement planning/saving is unlikely to affect the age at which you may be able to retire.

Buildings and land that an individual owns are examples of _____________.

To protect yourself from risk, you should consider insuring your major assets.

The process of forecasting future expenses and incomes is called:

___________ are anything we own, such as a car or a home.

A personal financial plan focuses on how to accumulate & grow wealth, but does not help you provide for emergencies.

A good way to think about _________ is as rent on money you borrow.

When creating a budget, it is important to consider the impact of taxes.

Which of the following refers to the amount of a specific asset that a person owns after subtracting any liabilities?

___________ are anything we owe, or our debts.

Having an ________ is the major means by which an individual saves money, builds wealth, and acquires assets.

Stocks, bonds, mutual funds, and real estate are all common types of __________.

The first step in creating a budget is:

When you use ____________, you are borrowing money.

Without insurance on a major purchase such as a home or a car, the owner assumes all of the _______.

In general, more education and specialized training leads to a higher income.

When a lender analyzes how likely you are to pay back a loan, the lender is determining your _______ ________.

Net worth is determined by subtracting an individual's liabilities from his/her

Payment schedules for most long-term loans involve ________ payments.

Insurance planning is an essential part of managing your risk.

Liquid assets include cash and assets that can be quickly and easily turned into cash.