Study Guide Review for Chapter 1, 2, & 3

Which of the following is not a true statement?

• After 1970, consumer debt skyrocketed.

• Credit industry in America has not changed much since 1917.

• Banks were willing to lend more money to consumers.

• Americans learned to borrow amidst post-WWII prosperity.

When it comes to personal finance, the math is easy. Whatʹs challenging is managing your ___.

• Friends

• Bank account

• Income

• Behavior

Which of the following is not a benefit of understanding your own money personality?

• Knowing your money personality allows you to excuse spending

• Recognizing who you are allows you to grow and learn.

• Knowing your money personality helps develop a better budget

• None of the above.

Which of the following best explains why income alone does not determine wealth?

• Only people who are natural savers can become wealthy

• Income doesn't dictate their spending/saving behavior

• Income alone does determine a person's wealth

• Investing is the only factor contributed to build wealth

Widespread financial insecurity of Americans is primarily because:

• The incomes of Americans are low

• Most Americans save a high proportion of their income

• American savings rate is low, they spend more than they earn

• Government programs help disabled or unemployed people

Which of the following steps is the First Foundation?

• Get out of debt

• Build wealth and give

• Pay cash for your car

• Save a $500 emergency fund

Which is not a reason your emergency fund should be kept in a separate account?

• So you don't get your spending and saving money confused.

• So your emergency fund savings can earn a lot of interest.

• So it is not too easy to access.

• So it is clear what money is only to used for emergencies.

Saving is about:

• Contentment and emotion

• Making more money and discipline

• Contentment and earning more money

• Pride and greed

For which of the following should you save?

• Purchases

• Wealth building

• Emergency fund

• All of the above

Using a sinking fund, how much must you save each month to buy a $3,600 car one year from now?

• $500

• $400

• $300

• $250