Personal Finance
What Is Personal Finance?
Personal finance is just that—your personal finances and what you choose to do with your money. It’s all the money decisions you make every day—like figuring out when and where to save and spend your cash.
Taxes and withholdings impact your _________, which is the amount of money you take home on your paycheck.
Net Income
An ________ is money you save to cover the cost for emergencies when they happen.
Emergency Fund
What is the first foundation?
$500 Emergency Fund
________ that you earn is a reward. ______ that you pay is a penalty.
Interest
______ is the additional cost a lender charges for borrowing their money.
Interest
Which of the following is NOT a component of a budget?
Giving
Income
Saving
Credit score
Credit Score
The price of goods and services increases over time due to:
Inflation
What is the second foundation?
Get out and stay out of debt.
Fill in the blank:
______ doesn’t open doors. It closes them.
Debt
Personal finance is ___% head knowledge and ___% behavior.
20 and 80
True or False:
A budget says what will happen with your money, while a cash-flow statement shows what already happened.
True
When you make a purchase but later wish you hadn‘t done so, you experience:
Buyer‘s remorse
What is the third foundation?
Pay cash for your car.
Fill in the blank:
You’ll either _______ your money or the lack of it will always ________ you.
manage, manage
What are the two types of money personalities?
Spenders and Savers
What are the Four Walls?
Food, utilities, shelter, and transportation
The best way to build wealth is to start investing early. You should start investing money . . .
Once you're out of college, living debt-free, and have 3–6 months of living expenses saved
What is the fourth foundation?
Pay cash for college.
______ steals your future, but ______ secures your future.
Debt and Saving
What is net worth and how do you calculate it?
To calculate your net worth, simply subtract what you owe (liabilities) from what you own (assets). If the value of your assets is greater than your liabilities, you’ll have a positive net worth! If the amount of your liabilities is larger than the value of your assets, you’ll have a negative net worth.
A common misconception is that budgeting will keep you from having fun, when in reality a budget...
Gives you permission to spend
What are the three questions to ask before you spend your emergency fund:
IS IT UNEXPECTED?
IS IT NECESSARY?
IS IT URGENT?
What is the fifth foundation?
Build wealth and give.
_____ is dumb, ______ is king!
Debt and Cash