Vocabulary
This is money owed to another person or company.
What is debt?
What you own, including money in the bank or investments.
What is an asset?
This expression describes households whose monthly income is fully used for expenses.
What is paycheck to paycheck?
The granting of a loan and the creation of debt.
What is credit?
The first foundation is to save this amount for emergencies.
What is $500?
The percentage of principal charged by the lender for the use of money.
What is the interest rate?
Financial debts or obligations.
What is a liability?
Why is personal finance dependent on your behavior?
Because financial success is more about habits and decisions than income.
Person or entity charging illegal high interest rates.
Who is a loan shark?
This foundation involves getting out of this completely.
What is debt?
A person or organization that uses a product or service.
Who is a consumer?
What you earn after payroll taxes and deductions are taken out.
What is net income?
Contrast the differences between short-, medium-, and long-term financial goals.
Short-term = <2 year;
Medium-term = 2–5 years
Long-term = 5+ years.
Why does your money personality affect your spending behavior?
Because your natural tendencies (spending or saving) guide financial decisions and risks.
This foundation involves paying cash for this type of purchase.
What is a car?
A plan of action that allows a person to meet immediate and long-term goals.
What is a financial plan?
When the value of your liabilities is greater than your assets.
What is negative net worth?
Why should you be aware if you are a saver or spender?
Because knowing your habits helps you adjust your financial plan effectively.
Give an example of how being a “spender” might affect financial planning.
A spender may struggle to save, leading to higher debt or missed goals.
This foundation encourages paying cash for this institution.
What is college?
The knowledge and skill base necessary to be an informed consumer and manage finances effectively.
What is financial literacy?
The amount by which assets exceed or fall behind liabilities.
What is net worth?
Explain what financial literacy means and why it matters.
Financial literacy means knowing how to manage money, make informed choices, and avoid debt traps.
Give an example of how being a “saver” might affect financial planning.
A saver may avoid risk but miss opportunities for growth or generosity.
This foundation is about building this type of wealth and giving.
What is wealth and generosity?