Questions and 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.
What are key components of financial planning?
- Write out a detailed plan for accomplishing your goals. 2. Replace money myths with money truths. 3. Regularly monitor and reassess your financial plan.
What best describes how Americans are being 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.
Personal financial success is primarily the result of?
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What best explains why income alone does not determine wealth?
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What are 3 consequences of spending more money than what you make?
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Which of the following statements about Americans and debt are true? (Select all that apply)
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When it comes to managing money, success is about _____% knowledge and ______% behavior.
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The widespread financial insecurity of Americans is primarily because?
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What is not a factor in becoming money smart?
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What is NOT a benefit of understanding your own money personality?
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Why was the use of credit uncommon prior to 1917?
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When it comes to personal finance, the math is easy. What's challenging is managing your ________.
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What is NOT a reason credit is marketed heavily to consumers in the United States?
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During the Great Depression, New Deal policymakers came up with mortgage and consumer lending policies that convinced commercial banks that?
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True financial security is achieved when your money begins to generate an income—your money starts working for you.
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Since you are a teenager, what you do now with money will have little effect on your financial future.
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Most Americans today are wealthy and will have financial security when they retire.
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Most Americans avoid the use of credit when it comes to buying big-ticket items like a car or furniture for their home.
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Learning the language of money is not that important because you will be able to depend on financial planners to organize your money.
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Having debt keeps you from building wealth.
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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.
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Expensive houses and new cars are a true indication of wealth.
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When developing a personal financial plan, one of the first things you should do is assess your current financial situation. This includes your income, assets, and liabilities.
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Everyone should have the same financial plan. A budget that works for one person should be sufficient for everyone.
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Explain why understanding your money personality is important when it comes to developing a money plan that is right for you.
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Review the Chapter 1, Section 2 segment titled, 'What's Your Money Personality?' Which of the four student responses most matches your view on money.
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Review the sidebar content in Chapter 1, Section 2 titled, 'Teen money attitudes shifted with the recent recession.' Write a paragraph summarizing the ways in which teen attitudes toward money, work, and family changed during the recent recession.
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Explain how marketing can affect your decisions when it comes to spending money.
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Describe some of the mistakes Americans often make when it comes to money.
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Does managing your money well mean that you cannot have fun with your money? Explain your answer.
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Does the 'history of credit and consumerism' segment make you view the use of credit differently than you did before? Explain.
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A person or business that offers loans at extremely high interest rates.
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A person or organization that uses a product or service.
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An obligation of repayment owed by one party to a second party.
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The granting of a loan and the creation of debt; any form of deferred payment.
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The knowledge and skill set necessary to be an informed consumer and manage finances effectively.
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A fee paid by a borrower to the lender for the use of borrowed money.
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A system by which goods and services are produced and distributed.
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A debt evidenced by a 'note', which specifies the principal amount, interest rate, and date of repayment.
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A period of temporary economic decline during which trade and industrial activity are reduced; generally identified by a fall in gross domestic product.
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All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting.
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What do you hope to learn and gain from this class?
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Study Notes
Importance of Personal Finance Education
- Learning personal finance helps prevent future financial mistakes.
- Understanding personal finance promotes significant long-term benefits.
Key Financial Planning Components
- Create a detailed plan for achieving financial goals.
- Distinguish between money myths and truths.
- Regularly monitor and update financial plans.
Credit and Consumer Behavior
- Credit marketing creates a desire for borrowing, ignoring negative impacts of interest and fees.
- Effective money management is crucial for personal financial success, emphasizing behavior over mere knowledge.
Income and Wealth
- Income does not determine wealth; spending and saving habits are vital.
- Spending beyond means leads to missed savings opportunities, increased stress, and debt cycles.
Historical Context of Credit
- Cultural and legal factors limited credit use before 1917.
- Post-World War II America saw increased consumer borrowing fueled by economic prosperity.
Money Management Skills
- A significant portion of personal finance success hinges on behavior (80%) versus knowledge (20%).
- Understanding one's money personality is essential for effective budgeting.
Common Misconceptions
- Many believe that financial literacy is unnecessary due to reliance on financial planners.
- Having debt hampers wealth building and financial security.
- Expensive items do not accurately indicate wealth.
Personal Financial Planning
- Assess one’s financial position, including income, assets, and liabilities, as an initial step in financial planning.
- Personal financial plans must be customized to individual circumstances and needs.
Marketing Influence on Spending
- Marketing can create a sense of urgency, making consumers more likely to spend.
American Consumer Mistakes
- Common errors include neglecting budget creation and misconceptions about credit scores.
- Effective money management can incorporate leisure spending when properly budgeted.
Economic Concepts
- A loan shark offers loans at exorbitant interest rates.
- Financial literacy enables informed consumer decisions.
- Interest is the cost paid for borrowing money.
- Consumers are individuals or entities using products/services.
Definitions and Concepts
- Personal finance encompasses all individual financial decisions and activities.
- A recession reflects a temporary economic decline marked by reduced trade and GDP.
Student Aspirations
- Students aim to gain comprehensive financial insights for future career paths, particularly in accounting.
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Description
This quiz explores the significance of personal finance education and its impact on long-term financial stability. It covers essential components of financial planning, the role of credit in consumer behavior, and the historical context of credit use in America. Test your knowledge and improve your financial literacy.
