Chapter 1 and 2 Test Flashcards
What does making the right choices with your money involve? (5)
Involves knowing how earning, budgeting, spending, giving, and saving affect your money
To gain understanding of personal finance you should know (4)…
WHERE YOU STAND FINANCIALLY, HOW MUCH INCOME YOU HAVE, WHAT GOALS YOU WANT TO SET, AND HOW YOU’LL REACH THOSE GOALS.
What money principle should we live by?
Live on less than you make
How do you know your net worth?
Subtract your liabilities from your assets
What tendency do savers have?
SAVERS HAVE A TENDENCY TO BE STRICT WITH THEIR MONEY AND NOT SPEND ANY OF IT.
How to avoid running out of money too quickly?
YOU CAN MAKE IT A
HABIT TO PLAN AND SET GOALS FOR YOUR MONEY.
What does living paycheck to paycheck mean?
LIVING PAYCHECK TO PAYCHECK OCCURS
WHEN A PERSON’S INCOME IS DEVOTED
TO EXPENSES, WHICH MEANS THAT LITTLE
TO NO MONEY IS PUT IN SAVINGS.
WHEN YOU SET FINANCIAL GOALS, THEY SHOULD BE . . . (5 things)
- Specific
- Measurable
- Time-Sensitive
- Yours
- Written
What should you do AS A SINGLE ADULT?
YOU SHOULD KEEP MANAGING YOUR MONEY AS A PRIORITY
Using credit was not always a socially acceptable practice but…
it has become normal in american culture
What are short term financial goals?
Financial goals that take up to two years to reach
Credit score is not a component of what
a budget
The four walls
Food, utilities, shelter, transportation
How many categories should you have in your budget?
No limit; as many as u need
What does a budget show?
How much money you plan to have come in and go out during the month
Your money personality can affect what?
your attitude toward budgeting
Going to the movies is an example of what kind of spending?
Discretionary and Variable
why is tracking your expenses throughout the month important?
It gives you insight into whether you’re sticking to the budget you set
What kind of money counts as income?
All the money that you receive
What will help keep you accountable to reaching your financial goals?
Finding a person you trust to help keep you on track
When is the right time to start creating and living by a budget?
Right now!
What should you do if you overspend in a category of your budget?
Adjust your budget by removing money from other spending categories
What to do to insure you are creating a reachable budget?
Check your calendar so you can plan for upcoming expenses
What is the best way to budget?
The way that works best for you
Why is budgeting so important?
It gives you control of your money and sets you up for financial success in the future.
