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RPF | Ch 1: Intro to PF Flashcards | StudBud
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RPF | Ch 1: Intro to PF
RPF | Ch 1: Intro to PF
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1
Personal finance is all the financial decisions ___ must make in order to earn, budget, save, spend, & give over time.
Individual or family
Individual or company
Bank
Company or organization
2
What is financial literacy?
The curriculum provided to college studentsabout finances for their degrees
The skills to read documents for finance classes, goals, & statements
The content provided in bank statements forconsumers
The knowledge necessary for people to be informed & manage their finances
3
Without any debt, you can be outrageously _______.
Generous
Cautious
Selfish
Thrifty
4
It is possible to pay for college with cash.
False
True
5
Using credit has not always been a socially accepted practice, but it has become ...
Normal in American culture
Less acceptable
Necessary for life in America
A practice used by the wealthy
6
Avoiding debt can lead to financial freedom and hope.
False
True
7
Why should you be aware of whether you are a saver or a spender?
Because spenders are more likely to go to jail.
It actually doesn't matter.
Being aware of how I handle my money is helpful and can help teach others.
Because savers are less likely to get married.
8
What are the Five Foundations?
A financial literacy technique
A personal financial action plan
A starting point for adults regarding finances
A common conclusion for debt
9
What is financial literacy?
The knowledge & skill to manage finances effectively
Being able to understand financial terms
Being able to spend more money than you make
Knowing what stocks and bonds are
10
What is a long-term goal?
up to a one year goal.
up to a two year goal.
up to a five year goal.
more than a five year goal.
11
When you set financial goals, they should be....
Only time-sensitive
Timely, bank-based, specific, and yours
Specific and measurable
Specific, measurable, time-sensitive, yours,and written
12
What is a medium-term financial goal?
up to a 25 year goal
up to a fifteen year goal
up to a five month goal
up to a five year goal
13
You should always make sure you have a...
Direct Deposit
Credit Card
Credit Line
Budget
14
What is the fifth foundation?
Get our and stay out of debt.
Build wealth and give.
Find a financial professional.
Pay cash for your car.
15
Why is personal finance dependent upon your behavior?
Finance is 80% behavior, so it is my behavior that affects my finances
If you are a good person, you will make money
It isn't
Finance is 20% behavior, so it is my behavior that affects my finances
16
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 purchases but spend moneywithout a plan
Strict with their money and not spend anyof it
17
An important money principle to consider is that you should ___ & ___ our money.
Save; invest
Spend; invest
Invest; lay out
Invest; endow
18
Being a spender has many more positives than being a saver.
True
False
19
To know your net worth, subtract your liabilities from your .
Previous net worth
Other liabilities
Net income
Assets
20
A money principle to keep in mind is to live on you make.
More than
Exactly 20% below what
Less than
The same as
21
What is the 1st foundation?
Build wealth & give
Pay cash for college
Save a $500 emergency fund
Open a checking account
22
In 1972, what association made borrowing money to attend college much easier than it had been?
The Student Loan Marketing Association(SLMA)
The Student Federal Funding Association(SFFA)
The Student Loan Approval Association(SLAA)
The Federal Student Approval Association(FSAA)
23
Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.
False
True
24
Franklin D. Roosevelt passed the New Deal bc of the Great Depression in the 1930s. What was the purpose of this program?
To create a borrowing system within thecountry
To alleviate financial concerns with theUnited Nations
To promote economic recovery and socialreform
To divide the national budget in half anddistribute it
25
Personal finance is 20% ______ and 80% _______.
Cause; effect
Reactions; behaviors
Behavior; head knowledge
Head knowledge; behavior
26
As a single adult, you should....
Keep managing your money as a priority
Beware of planned and budgeted buying
Seek a financial counselor or advisor by age 25
Have an accountability partner you trust somewhat
27
Your money personality impacts . .
Your understanding of bank transactions
How you handle money
What you plan for as an adult
Your financial literacy level
28
How are assets and liabilities connected to net worth?
Subtract liabilities from assets to calculate net worth.
Subtract assets from liabilities to calculate net worth.
29
A ______ financial goal takes up to two years to reach.
short-term
five-level
medium-term
long-term
30
What does living paycheck to paycheck mean?
Income is devoted to expenses leaving little to no money for savings
If you cannot plan past the next pc due to financial & budget probz
Someone that waits for their next pc to plan for the month's expenses
A person chooses not to deposit their paycheck
31
If your assets total more than your liabilities, you will have a(n) ____ net worth.
Negative
Unknown
Postivie
Equal
32
To gain an understanding of your personal finances, you should know . . .
Your financial goals
How much income you have
Your investment portfolio and your financialadvisors’ contact information
Where you are financially, your income, goals you have & they'll be reached
33
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
You can avoid making any purchases for thenext 30 days.
You can invest in college.
You can put your money in a safe place, likea bank, and not spend it.
34
After WW1, the demand for products increased, & people began getting credit w/o loan sharks. Because of this, credit...
Was devalued in the marketplace
Started to become more socially acceptable
Was offered at even higher interest rates byloan sharks
Increased so rapidly, loan sharks becameobsolete
35
You are either only a natural save or a natural spender. You cannot have a balance of both.
True
False
36
Making the right choices with your money—managing your money—involves knowing how . . .
Earning, budgeting, saving, spending, andgiving affect your money
Consumer decisions will affect youraccounts
Planning, saving, spending, &investing will define your financial portfolio
Making bank deposits using registers w/ the appropriate transactions listed
