Financial Psychology: Identifying Your Financial Behaviors

A child whose parents make poor financial decisions have a greater impact on her development than a child whose parents make good financial decisions.

• True

• False

_____ are unreasonable behaviors that can result in negative financial outcomes.

• a) Information-seeking, reinforcement, and modesty

• b) Research, forecasting, and assessment

• c) Financial planning, budgeting, and evaluation

• d) Mental accounting, anchoring, and overconfidence

Paying student loans on time, minimizing debt, and saving money before purchasing wants are all examples of positive:

• a) Financial Habits

• b) Financial Outcomes

• c) Financial Behaviors

• d) Financial Conventions

Isaiah has a long commute to work each day. He could use public transportation, but he insists on driving his expensive sports car. It is important for Isaiah

• True

• False

Wanda was raised in a very wealthy community, but now lives on a modest income. She did not like many of her rich peers because they were spoiled and arrogant. As an adult, Wanda tries to steer clear of people who consider themselves wealthy because she wants to avoid being labeled as wealthy but spoiled/arrogant.

• True

• False

Gary’s company recently gave out holiday bonuses to its employees. Gary’s bonus was 25% higher than he expected. When everyone else is talking about their bonuses at the holiday party, Gary stays quiet. Gary opted to keep quiet because _____.

• a) he wanted to avoid any money-related discussions as he felt he doesn’t deserve it.

• b) he was secretly disappointed as he wanted something more.

• c) he wanted to wait until he could buy his expensive car and show it off.

• d) he had already planned to put the extra money into his savings account

You cannot control the outcome of every financial decision you make or action you take, but practicing positive financial behaviors makes achieving your desired outcomes more likely.

• True

• False

Which of the following is an example of a financial outcome? More than one answer may be correct.

• a) You decreased your credit card debt by 15% and increased your savings account by 10%.

• b) You have decided to check your credit score once per quarter.

• c) By the end of the year, you have removed three negative results from your credit report.

• d) You would like to refinance your home mortgage at a lower interest rate.

Being aware of your fundamental beliefs and feelings about money is a critical first step toward changing your financial behaviors for the positive, accomplishing your financial goals, and reaching independent financial security. a) True b) False

• True

• False