Chapter One Flashcards
Personal Finance:
all the financial decisions an individual or family must make in order to earn, budget, save, spend, and give money over time
Consumer:
a person or organization that uses a product or service
Debt:
money owed to another person or company
Paycheck to Paycheck:
an expression used to describe a person or household whose monthly income is devoted to expenses and has little to no savings
Personal finance is only ___ head knowledge and ___ behavior
20%, 80%
Almost ___ of Americans use all of the money they get from one paycheck just to make it to the next.
80%
Once you understand how _____, _____, _____, ______, and _____ affect your money, you’ll have all the tools you need to make the right choices.
earning, budgeting, saving, spending, and giving
In America, 72% of people say they‘re burdened by consumer debt. The average borrower has over $_______ of debt—not including a mortgage!
34,000
Credit:
the granting of a loan and the creation of debt; any form of deferred payment
Interest Rate:
the percentage of principal charged by the lender for use of its money
Loan Shark:
person or entity that charges borrowers interest rates above an established legal rate
Interest:
the additional cost a lender charges for borrowing their money
__% of American adults have at least one credit card
83
Prior to 1920, the only way for banks to make money by loaning money was to charge sky-high interest rates. But that was illegal, so most banks stayed out of the credit business. T/F
T
Before World War 1 the average person could get credit without turning to loan sharks, so buying on credit became more socially accepted T/F
F, after
