WorksheetsStudy Guide Review for Chapter 1, 2, & 3
Total questions: 50
Worksheet time: 2hrs 38mins
Which of the following is not a true statement?
After 1970, consumer debt skyrocketed.
Credit industry in America has not changed much since 1917.
Banks were willing to lend more money to consumers.
Americans learned to borrow amidst post-WWII prosperity.
When it comes to personal finance, the math is easy. Whatʹs challenging is managing your ___.
Friends
Bank account
Income
Behavior
Which of the following is not a benefit of understanding your own money personality?
Knowing your money personality allows you to excuse spending
Recognizing who you are allows you to grow and learn.
Knowing your money personality helps develop a better budget
None of the above.
Which of the following best explains why income alone does not determine wealth?
Only people who are natural savers can become wealthy
Income doesn't dictate their spending/saving behavior
Income alone does determine a person's wealth
Investing is the only factor contributed to build wealth
Widespread financial insecurity of Americans is primarily because:
The incomes of Americans are low
Most Americans save a high proportion of their income
American savings rate is low, they spend more than they earn
Government programs help disabled or unemployed people
Which of the following steps is the First Foundation?
Get out of debt
Build wealth and give
Pay cash for your car
Save a $500 emergency fund
Which is not a reason your emergency fund should be kept in a separate account?
So you don't get your spending and saving money confused.
So your emergency fund savings can earn a lot of interest.
So it is not too easy to access.
So it is clear what money is only to used for emergencies.
Saving is about:
Contentment and emotion
Making more money and discipline
Contentment and earning more money
Pride and greed
For which of the following should you save?
Purchases
Wealth building
Emergency fund
All of the above
Using a sinking fund, how much must you save each month to buy a $3,600 car one year from now?
$500
$400
$300
$250
Rent is what kind of expense:
Fixed expense
Variable expense
Discretionary expense
Intermittent expense
Eating out is what kind of expense:
Fixed expense
Variable expense
Discretionary expense
Intermittent expense
Which of the following is not a guideline for budgeting with an irregular income?
Prioritize the list in order of importance.
Make a list of all of your expenses for the month ahead.
Budgeting with an irregular income is the same as any budget.
When paid, spend your money down the list in priority.
Which of the following is something that a typical millionaire would do?
Lease a new car
Spend less money than he or she makes
Carry debt
Replace things that are not broken
Doing a budget does not:
Doing a budget does not:
Remove guilt and shame sometimes associated with a purchase
Make overspending more likely
Show if you are overspending in an area
Everyone should have the same financial plan. The same budget will work well for everyone.
True
False
As a teenager, what you do now with money will have little effect on your financial future.
True
False
Having debt keeps you from building wealth.
True
False
Credit system today is structured to accommodate for unemployment and income instability
True
False
Learning the language of money is not important, you can depend on financial planners.
True
False
The first thing you should save for is your retirement fund.
True
False
Americans typically maintain a very high savings rate.
True
False
You should save money for three basic reasons: emergency fund, purchases and wealth building.
True
False
Your income level greatly affects your saving habits.
True
False
You should keep your emergency fund in the same account as your spending money.
True
False
Having more than one bank account is never a good idea, it can complicate money management.
True
False
Online bill pay allows you to make a payment without writing a check and sending in the mail.
True
False
The envelope system works great for managing spending on things that are not fixed monthly.
True
False
Automatic account transfers is the easiest way to build your savings or your emergency fund.
True
False
The number-one cause of divorce in North America today is stress and disagreements over money.
True
False
A period of temporary economic decline during which trade and industrial activity are reduced
market economy
recession
A fee paid by a borrower to the lender for the use of borrowed money
bills
interest
A system by which goods and services are produced and distributed
economy
assets
A person or business that offers loans at extremely high interest rates
loan shark
creditor
All the decisions and activities of an individual or family regarding their money.
personal finance
currency
Money set aside and left alone for a ʺrainy day.ʺ
emergency fund
retirement account
Saving money over time for a large purchase
installment loan
sinking fund
The five steps to financial success
Five money myths
Five Foundations
Interest paid on interest previously earned
compound interest
simple interest
Money today has different buying power than the same amount of money in the future
interest
time value of money
An item that is bought without previous planning or consideration of the long-term effects
sale item
impulse purchase
Non-essential expenses
discretionary
intermittent
A summary of past income and outgo over a certain time period
cash flow statement
budget
Expenses that remain the same from month to month
variable expenses
fixed expenses
A cash flow plan that assigns an expense to every dollar of your income
zero-spending plan
zero-based budget
The typical American has this type savings rate
positive
negative
The percentage by which your money grows is called this
reconciling
rate of return
Fee for an overdrawn account
non-sufficient funds
reconciling
Checking your bank statement against your account register
non-sufficient funds
reconciling
Percentage of Americans living paycheck to paycheck:
25%
70%
90%
50%
