Dave Ramsey Personal Finance Flashcards

Questions and Answers

Having debt keeps you from building wealth.

True

What is an obligation of repayment owed by one party to a second party?

Debt

What is a debt evidenced by a 'note' that specifies the principal amount, interest rate, and date of repayment?

Loan

The widespread financial insecurity of Americans is primarily because of?

The saving rate of Americans is low and many borrow in order to spend more than they earn Signup and view all the answers

How are Americans outsmarted by banks and other lenders?

Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and fees continue to destroy our financial well-being. Signup and view all the answers

Which of the following is not a true statement about the credit industry in America?

The credit industry in America has not changed much since 1917. Signup and view all the answers

Which of the following is not a benefit of understanding your own money personality?

Knowing your money personality allows you to excuse excessive spending because it is simply part of your nature. Signup and view all the answers

Personal financial success is primarily the result of?

Managing your money behavior Signup and view all the answers

Which of the following is not a reason credit is marketed heavily to consumers in the United States?

The use of credit is not socially accepted in the United States. Signup and view all the answers

During the Great Depression, New Deal policymakers concluded that consumer credit could be profitable. True or False?

True Signup and view all the answers

Key components of financial planning include all of the following except:

Allow your financial planner to make all of your major money decisions. Signup and view all the answers

The knowledge and skill set necessary to be an informed consumer and manage finances effectively is known as?

Financial literacy Signup and view all the answers

A system by which goods and services are produced and distributed is called?

Economy Signup and view all the answers

A fee paid by a borrower to the lender for the use of borrowed money is known as?

Interest Signup and view all the answers

A person or business that offers loans at extremely high interest rates is called?

Loan shark Signup and view all the answers

When developing a personal financial plan, one of the first things you should do is assess your current financial situation.

True Signup and view all the answers

Most Americans today are wealthy and will have financial security when they retire.

False Signup and view all the answers

When it comes to managing money, success is about _% knowledge and _% behavior.

20,80 Signup and view all the answers

The granting of a loan and the creation of debt; any form of deferred payment is known as?

Credit Signup and view all the answers

Which of the following is not a factor in becoming money smart?

Learn how to read your credit card statements Signup and view all the answers

What best explains why income alone does not determine wealth?

How much money a person makes does not dictate his or her spending and saving behavior. Signup and view all the answers

Expensive houses and new cars are a true indication of wealth.

False Signup and view all the answers

Learning the language of money is not that important because you will be able to depend on financial planners to manage your money.

False Signup and view all the answers

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc., is known as?

Personal Finance Signup and view all the answers

When it comes to personal finance, the math is easy. What's challenging is managing your __________.

Behavior Signup and view all the answers

Everyone should have the same financial plan. A budget that works for one person should be sufficient for everyone.

False Signup and view all the answers

The credit system today is structured to accommodate a state of uncertain employment and income instability, utilizing high interest rates and fees to turn huge profits.

True Signup and view all the answers

Why should students learn about personal finance?

Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future. Signup and view all the answers

What is a consequence of spending more than you make?

All of the above Signup and view all the answers

Why was the use of credit uncommon prior to 1917?

All of the above Signup and view all the answers

Since you are a teenager, what you do now with money will have little effect on your financial future.

False Signup and view all the answers

True financial security is achieved when your money begins to generate an income; your money starts working for you.

True Signup and view all the answers

Most Americans avoid the use of credit when it comes to buying big-ticket items like a car or furniture for their home.

False Signup and view all the answers

A period of temporary economic decline during which trade and industrial activity are reduced is known as?

Recession Signup and view all the answers

A person or organization that uses a product or service is called?

Consumer Signup and view all the answers

Only a few people in America have the ability to become a millionaire.

False Signup and view all the answers

It is possible to get through college and graduate debt-free.

True Signup and view all the answers

What is the number one reason students drop out of college?

Money Problems Signup and view all the answers

It is important that you get to know your money __________.

Personality Signup and view all the answers

What is the second key of a successful financial plan?

Set money goals Signup and view all the answers

Once you have established your financial plan you need to write it down.

True Signup and view all the answers

What is the first key component of a successful financial plan?

Assess your financial situation Signup and view all the answers

Seven out of every ten families in America live ___.

Paycheck to paycheck Signup and view all the answers

A lot of people you think 'look' wealthy are completely broke.

True Signup and view all the answers

Prior to the 1970's, debt was something most Americans were ashamed of.

True Signup and view all the answers

Buying things on credit was extremely rare before which year?

1917 Signup and view all the answers

Credit cards and car loans are a great idea for most people.

False Signup and view all the answers

The average student loan debt is about?

$30,000 Signup and view all the answers

Things are always as they seem.

False Signup and view all the answers

Being like everyone else means being broke and in debt.

True Signup and view all the answers

In America, being 'normal' is ______.

Broke Signup and view all the answers

Personal finance is % behavior and % knowledge.

80, 20 Signup and view all the answers

Who profits from interest on credit card debt?

Credit card companies Signup and view all the answers

The debt system helps people gain wealth.

False Signup and view all the answers

Americans today charge over __________ a year on their credit cards.

1 trillion Signup and view all the answers

You should always use a credit card for purchases.

False Signup and view all the answers

To manage money successfully, you must understand the _________ of money.

Language Signup and view all the answers

Debt can cause stress and gets in the way of pursuing your dreams and passions.

True Signup and view all the answers

If you put what you learn into practice, you can?

Tell your money what to do Signup and view all the answers

We all have strengths and weaknesses when managing our money.

True Signup and view all the answers

You need to learn how to manage your money __________.

Behavior Signup and view all the answers

Only accountants and financial experts can win with money.

False Signup and view all the answers

The best way to manage money is to learn how to manage __________.

You Signup and view all the answers

Being 'money smart' is very difficult and takes a lot of time to learn.

False Signup and view all the answers

Study Notes

Personal Finance Fundamentals

Debt hinders wealth accumulation; managing it effectively is crucial for financial health.
Debt is defined as an obligation for repayment from one party to another.
A loan is a type of debt that includes a note specifying the principal, interest rate, and repayment date.

Financial Literacy and Consumer Behavior

Financial insecurity in America stems from low saving rates; many individuals borrow to spend beyond their means.
Credit is marketed aggressively, enticing consumers while obscuring damaging interest rates and fees.

Historical Context of Credit

Credit policies established during the Great Depression revealed consumer credit's profit potential, influencing modern lending practices.
Before 1917, credit usage was rare, largely due to societal shame surrounding debt.

Personal Finance Strategies

Understanding one’s money personality is essential; it should not justify irresponsible spending.
Personal finance success hinges on managing financial behaviors rather than merely acquiring knowledge.

Myth-Busting About Wealth

The belief that only a few can achieve millionaire status is false; wealth accumulation is possible for many.
Wealth is not indicated by extravagant purchases; true financial security involves your money working for you over time.

Importance of Financial Planning

Key components of financial planning include assessing one’s financial situation, setting money goals, and documenting the plan.
Most American families live paycheck to paycheck, underscoring the need for effective budgeting strategies.

Impact of Credit on Consumers

The modern credit system is designed to exploit economic uncertainties, leading to high-interest profits.
Americans are significant users of credit, often resulting in over a trillion dollars charged annually.

Financial Empowerment

Learning the language of money is vital for managing personal finances effectively.
Managing money successfully requires both understanding financial concepts and controlling behavior.

Common Misconceptions

Higher income does not automatically equate to wealth; spending and saving habits play a crucial role in financial success.
Avoiding reliance on credit for significant purchases is advisable for maintaining financial health.

Conclusion

Financial literacy and smart money management equip individuals to avoid detrimental debt and foster financial stability in the long run.
Understanding personal finance is crucial for achieving both short-term and long-term financial goals.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on key concepts of personal finance as introduced by Dave Ramsey. This quiz covers essential definitions and principles such as debt and wealth-building, featuring answers to pre-test and post-test questions. Perfect for reinforcing your understanding of financial literacy.

Dave Ramsey Personal Finance Flashcards

Questions and Answers

Having debt keeps you from building wealth.

What is an obligation of repayment owed by one party to a second party?

What is a debt evidenced by a 'note' that specifies the principal amount, interest rate, and date of repayment?

The widespread financial insecurity of Americans is primarily because of?

How are Americans outsmarted by banks and other lenders?

Which of the following is not a true statement about the credit industry in America?

Which of the following is not a benefit of understanding your own money personality?

Personal financial success is primarily the result of?

Which of the following is not a reason credit is marketed heavily to consumers in the United States?

During the Great Depression, New Deal policymakers concluded that consumer credit could be profitable. True or False?

Key components of financial planning include all of the following except:

The knowledge and skill set necessary to be an informed consumer and manage finances effectively is known as?

A system by which goods and services are produced and distributed is called?

A fee paid by a borrower to the lender for the use of borrowed money is known as?

A person or business that offers loans at extremely high interest rates is called?

When developing a personal financial plan, one of the first things you should do is assess your current financial situation.

Most Americans today are wealthy and will have financial security when they retire.

When it comes to managing money, success is about ___% knowledge and ___% behavior.

The granting of a loan and the creation of debt; any form of deferred payment is known as?

Which of the following is not a factor in becoming money smart?

What best explains why income alone does not determine wealth?

Expensive houses and new cars are a true indication of wealth.

Learning the language of money is not that important because you will be able to depend on financial planners to manage your money.

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc., is known as?

When it comes to personal finance, the math is easy. What's challenging is managing your __________.

Everyone should have the same financial plan. A budget that works for one person should be sufficient for everyone.

The credit system today is structured to accommodate a state of uncertain employment and income instability, utilizing high interest rates and fees to turn huge profits.

Why should students learn about personal finance?

What is a consequence of spending more than you make?

Why was the use of credit uncommon prior to 1917?

Since you are a teenager, what you do now with money will have little effect on your financial future.

True financial security is achieved when your money begins to generate an income; your money starts working for you.

Most Americans avoid the use of credit when it comes to buying big-ticket items like a car or furniture for their home.

A period of temporary economic decline during which trade and industrial activity are reduced is known as?

A person or organization that uses a product or service is called?

Only a few people in America have the ability to become a millionaire.

It is possible to get through college and graduate debt-free.

What is the number one reason students drop out of college?

It is important that you get to know your money __________.

What is the second key of a successful financial plan?

Once you have established your financial plan you need to write it down.

What is the first key component of a successful financial plan?

Seven out of every ten families in America live ________ __ _________.

A lot of people you think 'look' wealthy are completely broke.

Prior to the 1970's, debt was something most Americans were ashamed of.

Buying things on credit was extremely rare before which year?

Credit cards and car loans are a great idea for most people.

The average student loan debt is about?

Things are always as they seem.

Being like everyone else means being broke and in debt.

In America, being 'normal' is ______.

Personal finance is ____% behavior and ____% knowledge.

Who profits from interest on credit card debt?

The debt system helps people gain wealth.

Americans today charge over __________ a year on their credit cards.

You should always use a credit card for purchases.

To manage money successfully, you must understand the _________ of money.

Debt can cause stress and gets in the way of pursuing your dreams and passions.

If you put what you learn into practice, you can?

We all have strengths and weaknesses when managing our money.

You need to learn how to manage your money __________.

Only accountants and financial experts can win with money.

The best way to manage money is to learn how to manage __________.

Being 'money smart' is very difficult and takes a lot of time to learn.

Study Notes

Personal Finance Fundamentals

Financial Literacy and Consumer Behavior

Historical Context of Credit

Personal Finance Strategies

Myth-Busting About Wealth

Importance of Financial Planning

Impact of Credit on Consumers

Financial Empowerment

Common Misconceptions

Conclusion

Studying That Suits You

Description

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