Dave Ramsey Chapter 1 - Review

All are key components of financial planning except:

• Write out a detailed plan for accomplishing your goals.

• Replace money myths with money truths

• Allow your financial planner to make all of your decisions.

• Regularly monitor and reassess your financial plan.

Which of the following statements best describes how Americans are being outsmarted by banks?

• Credit is marketed so well that we want to have it.

• We are taught that we can buy happiness.

• Buying things on credit has become acceptable in our culture

• We are driven by consumerism.

Personal financial success is primarily the result of:

• Managing your money behavior

• Winning the lottery

• Generous welfare and unemployment programs

• Inheriting money from your relatives

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 not determine wealth

• Only people who are natural savers can become wealthy

• The money a person makes does not dictate her spending behavior.

Which of the following is a consequence of spending more than you make?

• Missed opportunities to save and invest

• Stress

• A cycle of debt

• All of these

Which of the following is not a true statement:

• Americans learned to borrow during post WWII prosperity

• The credit industry in America has not changed much since 1917

• After 1970, consumer debt skyrocketed

• As banks made profits, they lent more money to consumers

When it comes to managing money, successes about _____% knowledge and _______% behavior.

• 50,50

• 60,40

• 80,20

• 20,80

The widespread financial insecurity of Americans is primarily because:

• The incomes of Americans are low

• Savings rate of Americans is low and they spend more

• Government programs cannot help people when they are disabled

• Most Americans save a high proportion of their income.

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

• Have knowledge in basic math

• Learn the language of money

• Manage your behavior with your money

• Learn how to read your credit card statements

Why was the use of credit uncommon before 1917?

• Laws prevented lenders from charging high interest rates

• Borrowing money was generally not socially acceptable

• Lending money to others was not profitable

• All of the above