Virtual Personal Finance Module 1 Exam Review

It’s important to let yourself see the truth about what you really have right now.

• True

• False

Living in the past is a good way to prepare for your future and helps you to make financial decisions.

• True

• False

The Fourth Principle Money states that you must first spend money on what you want in life.

• True

• False

An essential part of your financial planning is to set aside enough savings to cover unexpected costs of illness, job layoffs and other emergencies.

• True

• False

A good example of living in the past is _____.

• Looking forward to a job.

• Creating a disagreement with your neighbor next door.

• Thinking about the job from which you were fired.

• Dreaming about what we have in our closets.

An expense you can acquire and then choose to exclude over time would be ______.

• Utility Bill

• Taxes

• Credit and Davis

• Out of pocket medical and dental costs

Your ultimate financial goal should be to ______ .

• buy a house with a three-stall garage

• reduce and eliminate your known expenses

• invest in new, up to date articles of clothing on a monthly basis

• go on a two week vacation annually

What is NOT considered an emergency

• A death in the family

• A car accident

• Your monthly health insurance payment

• Your house flooding.

How much money should be in an emergency fund?

• 1- 2 months worth of expenses

• 3-4 months worth of expenses

• 6-8 months worth of expenses

• 12 months worth

Which item is ok to use your emergency fund for?

• To buy new clothes for school

• Travel to the funeral of a death in the family

• Take my girlfriend out on an expensive date

• Go on vacation