Chapter 1
What is The First Foundation?
Save a $500 emergency fund
A __________ financial goal takes up to 1 year to reach.
Short-term
Why is budgeting so important?
It gives you control of your money and sets you up for financial success in the future
What is the Third Foundation?
Pay cash for your car
What does living paycheck to paycheck mean?
A person’s income is devoted to expenses with little to no savings
How many categories should you have in your budget?
No limit; use as many as you need to keep your budget accurate!
You’ll have less freedom with your money if you…
Are paying for things in your past
The amount of interest charged on a debt but not yet collected is called…
Accrued interest
When you set financial goals, they should meet what criteria?
Specific, measurable, attainable, realistic, and time-sensitive
How many months does it usually take for your budget to start working as a budget should?
Three
The only place you should keep your emergency fund money is…
A savings account or money market account
One of the main reasons we build wealth is so that we can…
Give to those in need
Personal finance is 20% __________ and 80% __________.
Head knowledge; behavior
Going to the movies is an example of what type of expenses?
Discretionary and variable
Which two habits are the most important for building wealth and becoming a millionaire?
Consistently investing money and giving it time to grow
True or False: 90% of millionaires make over $100,000 a year.
False
Without any debt, you can be outrageously…
Generous
According to Dave Ramsey, the first priority in your budget should be…
Giving
__________ is a millionaire’s best friend.
Compound growth
True or False: In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation.
False