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?
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What is The First Foundation?
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Being a spender has many more positives than being a saver.
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Personal finance is all the financial decisions a(n) _______ must make.
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What happened to the acceptability of credit after World War I?
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A money principle to keep in mind is to live on _______ you make.
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To know your net worth, subtract your liabilities from your _____.
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What is financial literacy?
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Savers have a tendency to be _____.
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What is the best way to avoid running out of money too quickly?
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What was the purpose of the New Deal passed by Franklin D. Roosevelt?
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An important money principle to consider is that you should _____ and _____.
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If your assets total more than your liabilities, you will have a(n) _____ net worth.
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What are The Five Foundations?
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Your money personality impacts ____.
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What does living paycheck to paycheck mean?
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In 1972, what association made borrowing money to attend college much easier?
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Without any debt, you can be outrageously _______.
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When you set financial goals, they should be _____.
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It is possible to pay for college with cash.
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As a single adult, you should ____.
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Personal finance is 20% _______ and 80% _______.
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Using credit has not always been a socially accepted practice, but it has become ____.
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Avoiding debt can lead to financial freedom and hope.
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A _____ financial goal takes up to two years to reach.
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What is The Fifth Foundation?
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You are either only a natural saver or a natural spender. You cannot have a balance of both.
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What does 1 Timothy 6:17 advise?
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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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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.