Dave Ramsey Chapter 1 Test Prep

Front

Interest

Back

The additional cost a lender charges for borrowing their money.

Front

Living Paycheck to Paycheck

Back

A description of a person or family whose monthly income barely gets them through the month and they have no savings.

Front

Positive Net Worth

Back

The dollar value of a person's assets is greater than the dollar value of their liabilities.

Front

Interest Rate

Back

The percentage of principal charged by the lender for the use of its money.

Front

Net Worth

Back

The total wealth of a person/family taking into account all of their assets and liabilities.

Front

Assets

Back

Resources owned by an individual or entity that have economic value.

Front

Liabilities

Back

Obligations or debts that an individual or entity owes to others.

Front

Budgeting

Back

The process of creating a plan to spend your money, ensuring that you can cover your expenses.

Front

Emergency Fund

Back

A savings account that is set aside for unplanned expenses or emergencies.

Front

Debt

Back

Money that is borrowed and must be repaid, typically with interest.