unit 1: intro to personal finance

Question 1

consumer

Answer 1

a person or organization that uses a product or service

Question 2

credit

Answer 2

the granting of a loan and the creation of debt; any form of deferred payment

Question 3

debt

Answer 3

an obligation of repayment owed by one party (the debtor/borrower) to a second party (the creditor/lender); in most cases this includes repayment of the original loan amount plus interest

Question 4

economy

Answer 4

a system by which goods and services are produced and distributed

Question 5

financial literacy

Answer 5

the knowledge and skill set necessary to be an informed consumer and manage finances effectively

Question 6

interest

Answer 6

a fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal

Question 7

loan

Answer 7

a debt evidenced by a “note”, which specifies the principal amount, interest rate, and date of repayment

Question 8

liabilities

Answer 8

your debt

Question 9

assets

Answer 9

anything you own that has value (car, house)

Question 10

net worth

Answer 10

assets/liabilities

Question 11

personal finance

Answer 11

all of the decisions and activities of an individual or family regarding their money, including spending, saving, and budgeting

Question 12

4 money personalities:

Answer 12

frustration, role models, pragmatic, and “money isn’t everything”

Question 13

3 levels of financial well-being:

Answer 13

survival, comfort, secure

Question 14

survival level

Answer 14

there is income, bills, and hope that there is enough money to get you to the end of the month (or next paycheck)

Question 15

comfort level

Answer 15

you have a basic understanding of money management. There are still income and bills but you pay yourself first

Question 16

secure level

Answer 16

you arrange your finances so that your wealth is your income. Your money is working for you

Question 17

frustration personality

Answer 17

many teens express negative emotions about money because of situations their parents are in

Question 18

role model personality

Answer 18

teens watch what their parents do with money

Question 19

pragmatic personality

Answer 19

students share their saving tips and budgeting experiences

Question 19

“money isn’t everything” personality

Answer 19

need money to survive, but is not a requirement in making people happy

Question 20

how to become money smart:

Answer 20

1. be comfortable with basic math
2. learn the language of money (vocabulary)
3. learn how to manage your money behavior (80%)

Question 21

how to learn the language of money:

Answer 21

1. know the language (understand the vocabulary)
2. communicate effectively with bankers, financial planners, etc.
3. be an expert of your money

Question 22

personal finance is ___ behavior and ___ head knowledge

Answer 22

80%; 20%