Dave Ramsey Final Exam Review

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What is 'good' debt?

Back

'Good' debt refers to borrowing that is considered beneficial for your financial future, such as student loans or mortgages, which can lead to increased income or asset value.

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What is 'bad' debt?

Back

'Bad' debt refers to borrowing that does not provide a return on investment, such as credit card debt used for non-essential purchases.

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What are the three main sources of funding for education?

Back

Grants, scholarships, and work.

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What is sales tax?

Back

Sales tax is a consumption tax imposed by the government on the sale of goods and services, calculated as a percentage of the purchase price.

Front

What should you consider before making a purchase?

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Ask yourself: Is this a need or a want? Can I afford it?

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What is the importance of tracking your expenses?

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Tracking expenses helps you understand your spending habits, manage your budget, and identify areas where you can save money.

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What is a budget?

Back

A budget is a financial plan that outlines expected income and expenses over a specific period, helping individuals manage their finances.

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What is the difference between a grant and a loan?

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A grant is financial aid that does not need to be repaid, while a loan is borrowed money that must be repaid with interest.

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What is the purpose of a credit score?

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A credit score is a numerical representation of a person's creditworthiness, used by lenders to assess the risk of lending money.

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What are the benefits of using a debit card?

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Debit cards allow you to spend only what you have in your bank account, helping to avoid debt and manage spending.