Chapter 6
as a consumer, you should consider inflation in your investment and retirement planning
False
Interest paid on interest previously earned
Compound Interest
The number one cause of divorce in North America today is stress and disagreements over money
true
You must establish credit in order to buy a house
true
A program that allows students to work part time while continuing their studies
work study
What is one thing that is not a need
eating out
A savings account that is set aside to be used only for emergency expenses
emergency fund
Describe the various payment options that come with a checking account
-debit card
-cash
-check
A yearly fee that's charged by the credit card company for the convenience of the credit card
Annual Percentage Rate
A form of federal or state financial aid that does not need to be repaid
grant
One purpose of advertising is to___
Inform the consumer
An account that generates interest income on the available balance in the account
Interest-Bearing Account
Your monthly budget should include ____
-Fixed expenses
-Variable expenses
-Discretionary expenses
Type of card issued by a bank that allows users to finance a purchase
Credit card
The total estimated student loan debt outstanding in the U.S. is ___
$1 trillion
To buy an item with credit
Financing
At your age, a fully funded emergency fund should be ___
$500
What does a cash flow plan remove
The "management by crisis" from your finances
One reason financing a car is a bad idea
-it depreciates
What are two reasons why you should avoid student loans
1. takes years to pay it back
2. have to pay interest
Latin Term for "buyer beware"
Caveat Emptor
Your income level greatly affects your saving habits
false
Doing a budget does not
Make overspending more likely
What can be done with a credit card but not a debit card
What is one way you can invest in yourself
read books