Saving
At your age, a fully funded emergency fund should be:
$500
An expense that stays the same is:
Fixed expense
A long-term rental agreement on a car; a form of secured long-term debt
Lease
When it comes to managing money, success is about ________% knowledge and ________% behavior.
20%, 80%
What is the First Foundation
Save a $500 emergency fund
Saving money over time for a large purchase.
Sinking fund
An expense that changes from time to time is:
Variable expense.
The granting of a loan and the creation of debt; any form of deferred payment
Credit
All of the decisions and activities of an individual or family regarding their money, including spending,saving, budgeting, etc.
Personal finance
What is the Second Foundation?
Get out of debt
Which of these is not a key to saving money?
A) Your income B) Discipline
C) Making saving a habit and a priority D) Focus
A) Income
Saving money is more about the determination/making it a priority, not our income.
An expense that is a nonessential is:
Discretionary expense
A fee paid by a borrower to the lender for the use of borrowed money.
Interest
The knowledge and skillset necessary to be an informed consumer and manage finances effectively
Financial Literacy
What is the Third Foundation?
Pay cash for your car.
This means to spend more than you earn.
Negative savings rate
Expenses that comes around at various times throughout the year, usually in larger sums
Intermittent expenses
What does a credit score measure?
Riskiness of repaying debt.
Which of the following is not a factor in becoming money smart?
A) Have knowledge of basic math
B) Manage your behavior with money
C) Learn how to read your credit card statements
D) Learn the language of money
C) Learn how to read your credit card statements
(That will come with learning language of money/basic math skills)
What is the Fourth Foundation?
Pay cash for college.
Three Basic reasons to Save:
-Emergencies
-Large Purchases
-Wealth Building
Explain what a zero-based budget is
Assigns every dollar of income a job (some to savings, some to expenses)
An obligation of repayment owed by one party to a second party
Debt
Key components of financial planning include all of the following except:
A) Replace money myths with money truths
B) Regularly monitor and reassess your financial plan
C) Write out a detailed plan for accomplishing your goals
D) Allow your financial planner to make all of your major money decisions
D) Allow your financial planner to make all of your major money decisions
What is the Fifth Foundation?
Build wealth and give.