EOG Review RI7.3

What is one recommended way to make your money work for you according to the passage?

• Pay yourself first

• Spend on luxury items

• Avoid all investments

• Use credit cards frequently

Why is it advised to avoid credit card debt?

• Credit cards have high interest rates

• Credit cards are free money

• Credit cards increase your savings

• Credit cards offer high returns

What is the first step in creating a financial plan as mentioned in the passage?

• Figure out your current financial status

• Set financial goals

• Start saving immediately

• Invest in stocks

What should you do after listing your financial goals according to the passage?

• Determine the cost and savings needed

• Buy a car

• Get a new credit card

• Spend on non-essential items

What is an investment as defined in the passage?

• An asset purchased with the hope of future income

• A way to spend money quickly

• A method to increase credit card debt

• A type of bank account

According to “Spending Smart,” what effect do high interest rates have on a person’s ability to pay off credit card debt?

• They increase the amount of money owed.

• They allow a greater return on investments.

• They increase the opportunity to easily buy expensive items.

• They allow for additional purchases, even when money is unavailable.

According to “Dreaming Big,” what is the effect of creating a financial plan?

• Debt is paid off more quickly.

• Goals are set to make better decisions.

• Opportunities increase for obtaining more money.

• Decisions can be made about what to pay off first.

According to “Spending Smart,” how does “maxing out” a credit card affect a person’s finances?

• It prevents a person from buying expensive items.

• It helps a person’s ability to buy something in the future.

• It allows a person to save more money at higher interest rates.

• It causes a person to pay more interest instead of saving money.

According to “Dreaming Big,” how does setting goals affect personal finances?

• People will know how much money to save.

• People will have cash to buy cars and clothes.

• People will know which things are the most important.

• People will have information as to when to start saving their money.

In “Spending Smart,” what is the effect of having money automatically transferred to a savings account?

• People avoid paying high interest rates on credit debt.

• People can create a financial habit with positive outcomes.

• People are less likely to use credit cards to make purchases.

• People are able to maintain a fund to pay high interest rates on debt.