Podcast
Questions and Answers
True or false: Voting can lead to financial freedom and hope?
True or false: Voting can lead to financial freedom and hope?
True (A)
To know your net worth, you subtract your liabilities from your:
To know your net worth, you subtract your liabilities from your:
- Previous net worth
- Assets (correct)
- Other liabilities
- Net income
True or false: Being a spender has many more positives than being a saver?
True or false: Being a spender has many more positives than being a saver?
False (B)
A _______ financial goal takes up to two years to reach.
A _______ financial goal takes up to two years to reach.
Any important money principle to consider is that you should blank and blank your money.
Any important money principle to consider is that you should blank and blank your money.
What should you always make sure you have?
What should you always make sure you have?
What is the first foundation?
What is the first foundation?
Personal finance is 20% blank and 80% blank.
Personal finance is 20% blank and 80% blank.
True or false: It is possible to pay for college with cash?
True or false: It is possible to pay for college with cash?
Your money personality impacts?
Your money personality impacts?
Making the right choices with your money involves knowing how:
Making the right choices with your money involves knowing how:
What was the purpose of the New Deal passed by Franklin D. Roosevelt?
What was the purpose of the New Deal passed by Franklin D. Roosevelt?
What is financial literacy?
What is financial literacy?
Without any _______ you can be outrageously generous.
Without any _______ you can be outrageously generous.
What association made borrowing money to attend college much easier in 1972?
What association made borrowing money to attend college much easier in 1972?
What is the fifth foundation?
What is the fifth foundation?
Savers have a tendency to be:
Savers have a tendency to be:
After World War I, credit became more socially acceptable due to:
After World War I, credit became more socially acceptable due to:
As a single adult, you should:
As a single adult, you should:
When setting financial goals, they should be:
When setting financial goals, they should be:
What is the best way to avoid running out of money too quickly?
What is the best way to avoid running out of money too quickly?
What are the five foundations?
What are the five foundations?
Using credit has not always been a socially accepted practice, but it has become:
Using credit has not always been a socially accepted practice, but it has become:
True or false: Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal?
True or false: Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal?
Personal finance is all the financial decisions an _______ must make in order to earn, budget, save, spend, and give money over time.
Personal finance is all the financial decisions an _______ must make in order to earn, budget, save, spend, and give money over time.
True or false: You are either only a natural saver or a natural spender; you cannot have a balance of both.
True or false: You are either only a natural saver or a natural spender; you cannot have a balance of both.
A principle to keep in mind is to live on _______ than you make.
A principle to keep in mind is to live on _______ than you make.
What does living paycheck to paycheck mean?
What does living paycheck to paycheck mean?
To gain an understanding of your personal finances, you should know:
To gain an understanding of your personal finances, you should know:
If your assets total more than your liabilities, you will have:
If your assets total more than your liabilities, you will have:
Why is personal finance dependent upon your behavior?
Why is personal finance dependent upon your behavior?
How are assets and liabilities connected to net worth?
How are assets and liabilities connected to net worth?
Contrast the differences between short, medium, and long-term financial goals.
Contrast the differences between short, medium, and long-term financial goals.
Why should you be aware of whether you are a saver or a spender?
Why should you be aware of whether you are a saver or a spender?
Identify the five foundations and describe each of them.
Identify the five foundations and describe each of them.
Explain how your money personality affects your spending behavior.
Explain how your money personality affects your spending behavior.
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Study Notes
Personal Finance Fundamentals
- True or false voting can lead to financial freedom and hope: True
- Net worth is calculated by subtracting liabilities from assets.
- Being a spender has more negatives than being a saver: False.
- A short term financial goal takes up to two years to achieve.
- Important money principles include the need to save and invest.
Financial Management Practices
- Always maintain a budget for effective financial management.
- The first foundation of personal finance is to save a $500 emergency fund.
- Personal finance comprises 20% head knowledge and 80% behavior.
Education and Financial Readiness
- It is indeed possible to pay for college with cash: True.
- Your money personality significantly influences how you manage finances.
Financial Decision Making
- Managing money involves recognizing how earning, budgeting, saving, spending, and giving affect your overall financial health.
- Franklin D. Roosevelt initiated the New Deal during the Great Depression to promote economic recovery and social reform.
- Financial literacy equips individuals with the skills necessary to be informed consumers and manage finances effectively.
Historical Context
- The Student Loan Marketing Association was established in 1972, making it easier to borrow money for college.
- The fifth foundation of personal finance involves building wealth and giving.
Behavioral Insights
- Savers tend to be strict with their money, avoiding unnecessary expenditures.
- Post World War I, credit became socially acceptable, reducing reliance on predatory lending practices.
Goal Setting and Planning
- Financial goals should be specific, measurable, time-sensitive, and personally relevant.
- The best strategy to avoid running out of money is to plan and set goals consistently.
Foundations of Financial Planning
- The five foundations form the basis of a personal financial action plan.
- Credit usage has transitioned to a normalized practice in contemporary American culture.
Knowledge vs. Behavior
- Personal finance is defined by the financial decisions an individual or family must make over time.
- Being strictly a saver or spender is a misconception; balance between both is possible: False.
- Living paycheck to paycheck means most income is used for expenses, leaving little for savings.
Understanding Finances
- To understand personal finances, one must know current financial status, income, and goals.
- When assets exceed liabilities, the financial outcome is termed positive net worth.
Relationship to Behavior
- Personal finance relies heavily on behavior; the balance of knowledge and behavior impacts net worth.
- Assets equate to valuable possessions, while liabilities represent debts; net worth is derived from the difference.
- Short-term financial goals are achievable in up to two years, medium goals within five years, and long-term goals take longer than five years.
Financial Awareness
- Being aware of whether you are a saver or spender helps facilitate discussions around financial management.
- The five foundations of personal finance, including establishing an emergency fund and avoiding debt, help manage finances effectively.
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