Personal Finance Ch. 1 Review

Comsumer

a person or organization that uses a product or service

Credit

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

Debt

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

Economy

a system by which goods services are produced and distributed

Financial Literacy

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

Interest

a fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principle (original loan amount)

Loan

a debt evidenced by a "note", which specifies the principle amount, interest rate and debt of repayment

Personal Finance

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

What would you most likely to learn about managing money?

You would most likely learn how to create a budget, avoid debt, and build wealth through intentional money management.

What do you think is the biggest struggle when it comes to managing money?

The biggest struggle is living paycheck to paycheck and not having a plan, which leads to relying on debt.

What is one thing you learned about the American credit industry?

One thing learned is that credit is heavily marketed as necessary, but it often traps people in long-term debt.

Why do you think Dave Ramsey is so passionate about teaching people how to manage money?

Dave Ramsey is passionate because he went through financial hardship himself and wants to help others avoid the same mistakes.

What does winning with money look like?

Winning with money means being debt-free, having a plan for your money, and building wealth to live and give generously.

5 Foundations

1. Save a $500 emergency fund

2. Get out of debt

3. Pay cash for your car

4. Pay cash for college

5. Build wealth and give