Consumer Awareness
What is opportunity cost?
What you give up when you purchase something else.
What is a common cause for debt?
Credit cards (buying a large purchase that they can't afford)
What is a zero-based budget?
Ensures that every dollar has a specific purpose.
Emergency fund
What is the student loan myth?
Believing student loans are a “good debt” because they are a path to getting an education
What is financing a purchase?
"Buying" something that you can't afford so you have to may payments on it.
Three ways you lose money when buying a car?
1. Payments
2. Interest
3. Depreciation
List 2 changes to behavior that will help build your wealth.
1. Live on less than you make
2. Keep finding ways to grow your income
2 basic reasons to save money
Purchases and wealth building
What does FASFA stand for?
Free application for federal student loans.
What is the biggest reason financing a purchase is a bad idea?
It causes you to go into debt.
Debt financial myth
List 5 changes that help you build your wealth.
1. Write a monthly budget
2. Plan your spending
3. Stay out of debt
4. Pay yourself first
5. Use gifts and "extra" income wisely
What is interest?
Interest paid on interest previously earned. (money in a bank account will earn interest overtime)
What are four ways you can make "free" money in for / in college?
FASFA, grants, scholarships, work study
Four common marketing Tactics
1. Personal selling
2. Financing
3. Media / advertising
4. Positioning
4 warning signs that you may have had your identity stolen
1. checks disappear from your checkbook
2. your credit account shows accounts you didn't open
3. bank and billing statement don't arrive on time
4. bills and credit account you didn't open
What is an emergency fund? (give an example)
Money set aside in an account for emergencies only! (EX: money to fix your car for an unexpected car accident)
Payments every month
1. Stress
2. Limitations
3. Take away from future
Five steps to develop power over purchase
1. Wait overnight
2. Consider you buying motives
3. Understand what you are buying
4. Consider the opportunity cost
5. Seek wise counsel
List the five steps to get out of debt.
1. Quit borrowing money
2. You must save money
3. Sell something
4. Get a part-time job or work overtime
5. Use the debt snowball method
Eight key terms from this chapter.
1. Budget
2. Cash flow statement
3. Carbon check
4. Envelope system
5. Impulse purchase
6. Overdraft
7. Reconcile
8. Zero-based budget
1. Save a $500 emergency fund
2. Get out of debt
3. Pay cash for your car
4. Pay cash for college
5. Build wealth and give
How can you cash flow your college education?
1. Plan ahead
2. Get good grades
3. Shop around