Personal Finance: Chapter 1 Review

This refers to all the money decisions a person or family must make in order to earn, budget, save, and spend money over time

• financial aid

• personal finance

• home finance

• cash flow statement

Personal finance is about _______% behavior and _______% head knowledge.

• 30, 70

• 20, 80

• 70, 30

• 80, 20

A measurement of the total dollar value of a person’s or business’ assets minus liabilities is called:

• net worth

• wealth

• earnings

• income

A liability can be described as:

• something you own that has value

• money you owe; a debt

• Something that goes down in value over time

• Money that you have in a savings account

The First Foundation is:

• Get out of debt

• Pay cash for a car

• Save a $500 emergency fund

• Build wealth and give

Which of the following allows invested money to grow over time?

• Compound interest

• Premium payments

• Taxes

• Inflation

The condition of having unlimited wants but limited resources is known as:

• Consumerism

• Scarcity

• Global Demand

• Budget

Refers to a monthly plan for how you are going to save and spend your income

• asset

• consumer

• expense

• budget

Refers to an expense that changes in dollar amount every month (ex: utility bills, gas, groceries)

• Variable Expense

• Fixed Expense

• Discretionary Expense

• Intermittent Expense

Refers to an expense for things you don't necessarily need. For example: Eating out, gifts, candy

• Variable Expense

• Fixed Expense

• Discretionary Expense

• Intermittent Expense