Chapter 1 Personal Finance Quiz

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

• Your financial goals

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

• How much income you have

• 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.

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

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

• Exactly 20% below what
• More than
• The same as
• Less than

To know your net worth, subtract your liabilities from your ______.

• Other liabilities

• Net income

• Previous net worth

• Assets

What is financial literacy?

• The content provided in bank statements for consumers

• The knowledge and skill base necessary for people to be informed consumers and manage their finances effectively

• The curriculum provided to college students about finances for their degrees

• The skills to read financial documents for personal finance classes, goals, and statements

What is the best way to avoid running out of money too quickly?

• You can make it a habit to plan and set goals for your money.

• You can avoid making any purchases for the next 30 days.

• You can put your money in a safe place, like a bank, and not spend it.

• You can invest in college.

An important money principle to consider is that you should ______ and ______ your money.

• Save; invest

• Invest; lay out

• Spend; invest

• Invest; endow

If your assets total more than your liabilities, you will have a(n) ______ net worth.

• Negative

• Equal

• Positive

• Unknown

What are The Five Foundations?

• A personal financial action plan

• A starting point for adults regarding finances

• A financial literacy technique

• A common conclusion for debt