Ramsey Classroom Final exam

When you finance a new car, you will end up paying more than the sticker price

True

The first priority in your budget should be _______________.

giving

The main reasons you should save your hard-earned money are so you can . . .

Cover emergencies, pay cash for large purchases, and build weatlh

Every American who earns an income must file a _________.

Federal tax return

Inflation, deflation, the rate of economic growth, price levels, national income, changes in employment rates, and GDP are all called . . .

economic indicators

Why is budgeting so important?

It gives you control of your money and sets you up for financial success in the future.

What is The Second Foundation?

Get out of debt and stay out of debt

You can fund your education by finding the right mix of __________, __________, and _________.

Works; Loans; Cash

You need to track everything that involves money, including . . .

Debt Card purchases, third-party app transactions, and atm withdraws

A leasing contract . . .

Is a legal document that allows the renter to use the property for a period of time

Which two habits are the most important for building wealth and becoming a millionaire?

Consistently investing money and giving it time to grow

Why do some accounts, like saving accounts at your local bank, earn interest?

because the bank pays you for the use of your money

Student loans are a type of "good" debt.

false

Why is tracking your expenses throughout the month important?

It gives you insight into whether your’re sticking to the budget you set.

Job shadowing is a great way to gain experience in a career field.

True

The very best investment you can make is in __________.

Yourself

Americans spend over $2100 a year on ______________

Impulse purchases

Many service industries—including massage therapy, financial services, auto repair, electrical work, and plumbing—don't require four-year degrees.

True

When deciding on the rigth bank for you, you should first identify what type of bank you want, the features that matter to you most, and _________.

What kind of accounts you want

What does "cost of living" refer to?

The average cost of the basic goods and services needed to maintain a certain standard of living

When you buy with credit, you typically spend more than you would with cash or a debit card.

True

Avoiding debt can give you financial peace and a sense of hope for the future.

True

Creating a budget, having clear money goals, and slowing down to think through a purchase are all practices of a _____________.

Wise Consumer

When you invest in a mutual fund, you are contributing to a pool of money that will be . . .

Invested in a mix of stocks, bonds and money market accounts

What is The First Foundation?

Save $500 emergency fund

Something that credit card commercials don't show you is . . .

People making payments for months or years on those credit card purchases

To gain an understanding of your personal finances, you should know . . .

Where you stand financially, how much income you have, what goals you want to set, and how you'll reach those goals

__________ is key when it comes to compound growth.

Time

Economics is a study of consumer __________.

Choices

Using online tax software or hiring a tax professional are both good options depending on your situation.

True

Getting good grades, driving safely, and driving an older car are examples of ways you can . . .

Lower your auto insurance rates

Your monthly rent payment is an example of a variable expense.

False

Many employers will research job candidates' social media posts.

True

Insurance helps you transfer the _________ from your bank account to the insurance company.

Risk

Why is personal finance dependent on behavior.

Personal Finance hinges on behavior because knowledge alone doesn’t guarantee good outcomes. Only our daily habits, emotion, and discipline can.

What are some key components of successful budgeting?

Clear financial goals, accurately tracking your income and expenses, and creating spending limits are a few examples of key components of having a successful budget.

How does planning and saving for your future help you build wealth?

You can use compound interest, you can strategically invest, and you can save sooner.

List three ways the credit card industry makes money off customers.

Interest charges, cardholder fees, and swipe fees.

List some examples of how a thief would commit card fraud.

Stealing the physical card, using skimmers, or stealing mail.

What are two questions smart spenders ask before making a purchase.

“Do I need this” and “Does it fit in my budget”

What’s the difference between soft skills and hard skills?

Hard skills are technical, teachable abilities that apply to a certain job, while soft skills are personal traits.

List five non-college options available for postsecondary education.

Apprenticeships, trade schools, certificate programs, coding bootcamps, and online learning platforms

Describe the process of balancing your checking book.

Start with the balance of your checking account. Then track all transactions. Next is to find any discrepancies. Finally you have to verify everything is balanced and repeat.

Explain the difference between gross income and net income.

Gross income is the total earning before taxes or deductions, while net income is the total you take home after taxes and deductions are taken out.