hr 5 Personal Money Management

The disadvantage to using credit cards to pay for goods and services is that you

• pay interest on purchases
• earn quarterly dividends
• establish a credit rating
• defer cash payments.

Which of the following would be the most appropriate item to purchase with a credit card:

• Airline ticket
• Small pizza
• Pack of gum
• Magazine

Every year since she was born, Sophia's grandparents invested $100 on her birthday. Sophia is now 18 and the investment has grown large enough to pay for most of her college expenses. Her grandparents explain that this is because her money has grown in two ways: by earning interest, and then by earning interest on that interest. This is an example of

• compound interest.
• simple interest
• present value.
• inflation.

Lyla is applying for a loan to buy a house for the first time. Which of the following should she be certain to do when applying for the loan:

• Read all paperwork carefully
• Inaccurately report her debts
• Overstate her assets
• Sign blank documents

An individual who decides to save a certain amount every month in order to have enough money on hand to buy a car in two years is

• setting financial goals.
• opening an account.
• making an investment.
• analyzing economic conditions.

If you are 17 right now, what is the best age to begin investing?

• 17
• 27
• 32
• 25

When organized people look at the week's projects and decide which ones should be done first, they are __________ activities.

• prioritizing
• scheduling
• classifying
• identifying

A clear understanding of our personal values will:

• encourage us to spend money on material goods.
• enable us to make choices that reflect what is important to us.
• enable us to save effectively.
• cause anxiety as we make consumer and financial decisions.

Something you are working to achieve within a defined period of time is a(an):

• goal
• ideal
• value
• dream

Goals:

• need to be realistic, have a target date, and, if possible, an associated cost.
• remain the same year after year, throughout life.
• need to reflect current income.
• are generally the same for middle class families.