Personal Finance Review Flashcards

Questions and Answers

What does making the right choices with your money involve?

Earning

Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.

False

You should always make sure you have a _____.

budget

What should you know to gain an understanding of your personal finances?

Where you stand financially, how much income you have, what goals you want to set, and how you'll reach those goals. Signup and view all the answers

What is The First Foundation?

Save a $500 emergency fund. Signup and view all the answers

Being a spender has many more positives than being a saver.

False Signup and view all the answers

Personal finance is all the financial decisions a(n) _______ must make.

individual or family Signup and view all the answers

What happened to the acceptability of credit after World War I?

Credit started to become more socially acceptable. Signup and view all the answers

A money principle to keep in mind is to live on _______ you make.

less than Signup and view all the answers

To know your net worth, subtract your liabilities from your _____.

assets Signup and view all the answers

What is financial literacy?

The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively. Signup and view all the answers

Savers have a tendency to be _____.

strict with their money and not spend any of it. Signup and view all the answers

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. Signup and view all the answers

What was the purpose of the New Deal passed by Franklin D. Roosevelt?

To promote economic recovery and social reform. Signup and view all the answers

An important money principle to consider is that you should _ and _.

save; invest Signup and view all the answers

If your assets total more than your liabilities, you will have a(n) _____ net worth.

positive Signup and view all the answers

What are The Five Foundations?

A personal financial action plan. Signup and view all the answers

Your money personality impacts ____.

how you handle money. Signup and view all the answers

What does living paycheck to paycheck mean?

Living paycheck to paycheck occurs when a person's income is devoted to expenses, which means that little to no money is put in savings. Signup and view all the answers

In 1972, what association made borrowing money to attend college much easier?

The Student Loan Marketing Association (SLMA). Signup and view all the answers

Without any debt, you can be outrageously _______.

generous. Signup and view all the answers

When you set financial goals, they should be _____.

specific, measurable, time-sensitive, yours, and written. Signup and view all the answers

It is possible to pay for college with cash.

True Signup and view all the answers

As a single adult, you should ____.

keep managing your money as a priority. Signup and view all the answers

Personal finance is 20% _ and 80% _.

head knowledge; behavior. Signup and view all the answers

Using credit has not always been a socially accepted practice, but it has become ____.

normal in American culture. Signup and view all the answers

Avoiding debt can lead to financial freedom and hope.

True Signup and view all the answers

A _____ financial goal takes up to two years to reach.

short-term. Signup and view all the answers

What is The Fifth Foundation?

Build wealth and give. Signup and view all the answers

You are either only a natural saver or a natural spender. You cannot have a balance of both.

False Signup and view all the answers

What does 1 Timothy 6:17 advise?

Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Signup and view all the answers

Study Notes

Personal Finance Basics

Managing money involves understanding earnings, budgeting, saving, spending, and goal-setting.
Establishing a budget is essential for effective money management.

Foundations of Financial Literacy

Financial literacy is the skill set needed to be an informed consumer and to manage personal finances.
The First Foundation encourages saving a $500 emergency fund.

Credit and Debt

Credit became more socially acceptable after World War I due to increased product demand.
The Student Loan Marketing Association (SLMA) was established in 1972, simplifying college borrowing.

Money Management Principles

Live on less than you earn to maintain financial health.
Know your net worth by subtracting liabilities from assets.
Financial goals should be specific, measurable, time-sensitive, personal, and written.

Money Personalities and Behavior

An individual's money personality affects how they handle finances.
Savers are often strict with money, while spenders may show a tendency to overspend.

Positive Financial Habits

Avoiding debt contributes to financial freedom and enhances generosity.
Setting financial goals regularly can prevent running out of money.

Foundations of Wealth

The Five Foundations outline a personal financial action plan aimed at building wealth.
The Fifth Foundation focuses on wealth-building as well as giving back.

Miscellaneous Facts

Living paycheck to paycheck indicates that all income is consumed by expenses, leaving little to no savings.
Proper money management remains a priority, especially for single adults.

Faith and Wealth

1 Timothy 6:17 advises against placing hope in uncertain wealth and encourages trust in God for provision.

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Description

Prepare for your personal finance exam with these helpful flashcards. Cover key concepts such as budgeting, earning money, and the history of banks in credit. Perfect for students looking to strengthen their understanding of personal finance management.