Intro to PF
What is the 1st Foundation?
Save $500 for an emergency fund
How often should you create a budget?
Monthly
When you make a purchase but later wish you hadn’t, you experience what?
buyer's remorse
Your greatest tool for building wealth is what?
Your income
What is the term for buying something without planning to do so in advance?
impulse buying
What is the fee charged for using borrowed money for a purchase?
Interest
What does a budget show you?
How much money you plan to come in and go out during a month.
What is the persistent rise in the cost of goods and services over time?
inflation
What is the debt snowball method?
Paying off debts from smallest to largest.
When you choose to spend your money now instead of investing it so it’s worth more in the future, you experience what?
Opportunity cost
When you take your total assets and subtract your total liabilities, what are you calculating?
Net worth
What should you do if you overspend in one category of your budget?
Adjust your budget by removing money from other spending categories.
What is an investment’s percentage of gain or loss over time?
rate of return
Car lease agreements come with a stipulation that you must pay a penalty if you do what?
Go over the pre-established mileage cap.
What part of your brain helps regulate your body’s stress response?
the amygdala
What are the two money personalities?
spender & saver
When is the right time to start creating and living by a budget?
Right now - it's never too early
What concept says that a certain amount of money today is worth more than the same amount in the future?
the time value of money
What are three ways the credit card industry makes money off of customers?
Interest charges, Cash advance fees, Annual fees, Over-the-limit-fees, Late payment fees, Merchant fees
What is a promise from the manufacturer that a product will be replaced or repaired if it’s faulty?
Manufacturer’s warranty
What is the knowledge and skill base necessary for people to be informed consumers and manage their finances effectively?
financial literacy
What is the envelope system?
It's a method of budgeting that uses envelopes labeled with specific budget categories for your cash.
What are the 3 questions to ask yourself before you spend your emergency fund?
Is it unexpected?
Is it necessary?
Is it urgent?
Credit card companies charge stores a 2–3% fee for every purchase made with credit cards. What is this called?
Merchant fee
When we are faced with a threat, what are the 3 possible responses?
Fight, flight or freeze