Personal Finance

What is a Credit Card?

• A loan that has to be paid off every month.

• An arrangement by which you can buy something now, with the promise that you will pay for it in the future.

• A money substitute for items you cannot afford.

• All of the above.

A credit card is an emergency fund.

• True

• False

What is net pay?

• Pay net of liabilities

• Pay plus bonus

• Pay after deductions

• Pay before deductions

How do you calculate net worth?

• Income divided by expenses

• Assets minus liabilities

• Income minus expenses

• Assets minus expenses

A monthly budget is an effective tool that will help you

• Spend a larger share of your earnings now

• Manage your spending and save for the future in order to accumulate wealth

• Keep your transportation costs low by purchasing a new car every two or three years.

• Select stocks that are more likely to increase in value over the long run.

Which of the following will help you generate income and accumulate wealth?

• Getting another credit card so you will have more borrowing power in the future.

• Borrowing funds in order to increase your current consumption.

• Setting aside funds regularly into savings and investments

• Making only the minimum monthly payment on your outstanding credit card balances.

When should you begin saving your money?

• Right away

• When you finish college

• When you reach retirement

• When you are 30