Dave Ramsey Chapter 2 & 3 Flashcards

True (A)

It gives you control of your money and sets you up for financial success in the future.

monthly

<p>Adjust your budget by removing money from other spending categories.</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>giving</p> Signup and view all the answers

<p>food, utilities, shelter, and transportation.</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>All the money you receive, including money from your job and gifts like birthday money.</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>three</p> Signup and view all the answers

<p>discretionary and variable.</p> Signup and view all the answers

<p>An expense that you don't need to spend money on but you choose to do so.</p> Signup and view all the answers

<p>It gives you insight into whether you're sticking to the budget you set.</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>When you have budgeted for every dollar to be in a category.</p> Signup and view all the answers

<p>live on less than you make.</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>By showing you only the monthly payment, they make the product seem affordable.</p> Signup and view all the answers

<p>Emergencies, large purchases, and wealth building.</p> Signup and view all the answers

<p>Be able to cover an unexpected expense with cash and protect you from having debt.</p> Signup and view all the answers

<p>Once you're out of college, living debt-free, and have 3-6 months of living expenses saved.</p> Signup and view all the answers

<p>Because the bank pays you to use your money.</p> Signup and view all the answers

<p>Give to those in need.</p> Signup and view all the answers

<p>How quickly your money will grow over time.</p> Signup and view all the answers

<p>Compound growth.</p> Signup and view all the answers

<p>accrued interest.</p> Signup and view all the answers

<p>Decide how much you'll need to save and the time frame you want to save it.</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>Save it until you have an emergency.</p> Signup and view all the answers

<p>Consistently investing money and patience to give it time to grow.</p> Signup and view all the answers

<p>Is it unexpected, is it necessary, is it urgent?</p> Signup and view all the answers

<p>Because cars depreciate in value.</p> Signup and view all the answers

Income remaining after taxes are deducted.

A plan that outlines how you'll manage your money, helping you control your spending and achieve your financial goals.

A monthly plan to manage your money effectively.

Adjusting your budget by moving money between categories to compensate for overspending in one area.

Breakdown of categories to track spending and make informed financial decisions.

The highest priority in your budget, often giving to charitable causes or fulfilling religious obligations.

Essential expenses that keep you safe and alive: food, utilities, shelter, and transportation.

Estimating income when it's inconsistent.

Expenses that remain the same every month, such as rent.

Expenses that fluctuate month to month, like electricity bills.

Any money you receive, including gifts, that contributes to your income.

The primary reason people don't budget, indicating a lack of financial discipline.

The time it takes for a budget to become a habit and function effectively.

Expenses that are not essential for survival, such as entertainment and dining out.

Tracking every dollar you spend to ensure you're sticking to your budget.

A plan outlining how you'll spend your money.

A review of your past financial transactions.

A budgeting method where every dollar is allocated to a specific category.

Living below your means and putting money aside for future financial security.

The order of financial priorities: give, save, then spend.

Stores often highlight only monthly payments to make purchases seem more affordable.

The primary reasons for saving: to cover unexpected expenses, make large purchases, and build long-term wealth.

A fund set aside to cover unexpected expenses.

The amount of money you need saved to cover 3-6 months of essential expenses.

The money earned by banks on deposits, which is paid out to depositors.

Creating wealth for future generations and to help people in need.

The rate at which your savings grow over time.

The exponential growth of savings due to interest compounding.

Unpaid interest accumulated on debt.

Planning for large purchases by estimating savings needed and timelines.

Many millionaires earn less than $100,000 per year.

Maintain a $500 emergency fund until a real emergency occurs.

Key questions to determine if an emergency situation justifies using your emergency fund.

Car payments can be financially detrimental due to vehicle depreciation.