PF: Chapter 1 Review

The widespread financial insecurity of Americans is primarily because:

• Americans spend more than they earn.

• Most Americans save a high proportion of their income

• The government doesn't help people enough.

• The incomes of Americans are low

What is the BIGGEST reason that debt is bad?

• People Laugh at you

• You pay interest

• It takes away money that could be used to build weatlh

• You get more stuff

When it comes to managing money, success is about ________% knowledge and ________% behavior.

• 80/20

• 20/80

• 15/85

• 92/8

Which of the following is NOT a reason credit is marketed heavily to consumers in the US.

• The credit industry has become extremely profitable.

• There is strong consumer demand for big-ticket items.

• Credit/debt is not socially accepted in the United States.

• Loaning money is profitable.

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

• Investing is the only factor that contributes to wealth.

• Income alone does determine a personʹs wealth.

• Only people who are natural savers can become wealthy.

• How much money you make does not decide how much you save.

Key components of financial planning include all of the following except:

• Write out a detailed plan for accomplishing your goals

• Replace money myths with money truths

• Hire someone to make all your money decisions.

• Regularly monitor and reassess your financial plan

A fee paid by a borrower to the lender for the use of borrowed money is called:

• Mortgage

• Savings

• Roth IRA

• Interest

Since you are an Adult in Training, what you do now with money will have no effect on your financial future.

• TRUE

• FALSE

Which of the following is NOT a factor in becoming money smart?

• Have knowledge of basic math

• Learn the language of money

• Manage your behavior with money

• Learn how to read your credit card statements

Personal financial success is primarily the result of:

• Managing your money behavior

• Winning the lottery

• Generous welfare and unemployment programs

• Inheriting money from your parents