Chapter 1 Review: Introduction to Personal Finance

Making the right choices with your money—managing your money—involves knowing how . . .

• Planning, saving, spending, and investing will define your financial portfolio

• To make bank deposits using registers with the appropriate transactions listed

• Consumer decisions will affect your accounts

• Earning, budgeting, saving, spending, and giving affect your money

Banks got into the credit business before 1920 because charging exceptionally high interest rates was legal.

• True

• False

You should always make sure you have a…

• Budget

• Credit line

• Direct deposit

• Credit card

To gain an understanding of your personal finances, you should know . . .

• Your financial goals

• How much income you have

• Where you stand financially, how much income you have, what goals you want to set, and how you’ll reach those goals

• Your investment portfolio and your financial advisors’ contact information

What is The First Foundation?

• Pay cash for college.

• Build wealth and give.

• Save a $500 emergency fund.

• Open a checking account.

Being a spender has many more positives than being a saver.

• True

• False

Personal finance is all the financial decisions a(n) must make in order to earn, budget, save, spend, and give money over time.

• Individual or family

• Company or organization

• Individual or company

• Bank

Avoiding debt can lead to financial freedom and hope.

• True

• False

After World War I, the demand for products increased, and people began getting credit without loan sharks. Because of this, credit…

• Started to become more socially acceptable

• Increased so rapidly, loan sharks became obsolete

• Was offered at even higher interest rates by loan sharks

• Was devalued in the marketplace

A money principle to keep in mind is to live on _______ you make.

• Exactly 20% below what

• More than

• The same as

• Less than