BF-M7

Question 1

______ defines all financial decisions and activities
of an individual or household, including budgeting,
insurance, mortgage planning, savings and retirement
planning.

Answer 1

Personal finance

Question 2

UNSCRAMBLE

(cinanalif ilannpgn) and (bgundigte pserilpiinc)
discussed in the past modules are also applicable in personal
finance.

Answer 2

Financial planning
budgeting principles

Question 3

A ____ is an important tool.

Answer 3

personal budget

Question 4

It is a finance plan
that allocates future personal income towards expenses,
savings and debt repayment.

Answer 4

personal budget

Question 5

In making your budgets you
should also consider your ____ and _____

Answer 5

needs
wants

Question 6

6 basic activities in personal finance

Answer 6

1. EARNING
2. BORROWING
3. SAVING
4. INVESTING
5. SPENDING
6. Donating

Question 7

You are receiving money for services rendered, goods sold or interest income.

Answer 7

EARNING

Question 8

You are receiving money from lenders causing a debt obligation.

Answer 8

BORROWING

Question 9

You are setting aside money for a specific purpose within a short period of time.

Answer 9

SAVING

Question 10

You are putting your money into work so that it can earn interest or appreciate within a long period of time.

Answer 10

INVESTING

Question 11

This involves greater risk but
yields greater returns

Answer 11

INVESTING

Question 12

You are giving out money for your personal needs or wants.

Answer 12

SPENDING

Question 13

You are giving out your money for charitable purposes.

Answer 13

Donating

Question 14

_____ goals, such as saving for a vacation or paying off small
debts, will be achieved within the next year

Answer 14

short-term

Question 15

______ goals have a time frame from one to five years.

Answer 15

intermediate

Question 16

_____ goals involve financial plans that are more than five years off, such as retirement, money for children’s college education, or the purchase of a vacation home

Answer 16

long-term

Question 17

TIMING OF GOALS
three time frames:

Answer 17

short-term goals
intermediate goals
long-term goals

Question 18

______ goals usually occur on a periodic basis and involve
items that are used up relatively quickly, such as food, clothing, and entertainment. Such purchases, if made unwisely, can have a negative
effect on your financial situation.

Answer 18

Consumable-product

Question 19

_____ goals usually involve infrequently purchased,
expensive items such as appliances, cars, and sporting equipment; these consist of tangible items.

Answer 19

Durable-product

Question 20

These goals may relate to personal relationships, health,
education, and leisure. Goal setting for these life circumstances is also necessary for your overall well-being

Answer 20

intangible-purchase goals

Question 21

Goal-Setting Guidelines:

__— ____, so you know exactly what your goals are so you can create a plan designed to achieve those objectives.

__— ____ with a specific amount.

__— ____, indicating a time frame for achieving the goal, such as three years. This allows you to measure your progress toward your financial goals

__— _____, involving goals based on your income and life situation.

__— ____, providing the basis for the personal financial activities
you will undertake.

Answer 21

S— specific
M— measurable
T— time-based
R— realistic
A— action-oriented

SMART

Question 22

10 Basic Principles of Personal Finance

Answer 22

1. KNOW YOUR TAKE HOME PAY
2. PAY YOURSELF FIRST
3. START SAVING AT YOUNG AGE
4. COMPARE INTEREST RATES
5. DON’T BORROW WHAT YOU CAN’T REPAY
6. BUDGET YOUR MONEY
7. HIGH RETURNS EQUAL HIGH RISKS
8. MAP YOUR FINANCIAL FUTURE
9. YOUR CREDIT PAST IS YOUR CREDIT FUTURE
10. STAY INSURED

Question 23

(Basic Principles of Personal Finance)

Before committing to significant expenditures, estimate how much income is likely to be
available for you.

Answer 23

KNOW YOUR TAKE HOME PAY

Question 24

(Basic Principles of Personal Finance)

Before paying bills and other financial obligations, set aside an affordable amount each
month in accounts designated for long-range goals and unexpected emergencies.

Answer 24

PAY YOURSELF FIRST

Question 25

(Basic Principles of Personal Finance) Recognize that your total savings are determined both by the interest you earn on those savings and the time period over which you save.

Answer 25

START SAVING AT YOUNG AGE

Question 26

(Basic Principles of Personal Finance) Obtain rate information from multiple financial services firms to get the best value for your money.

Answer 26

COMPARE INTEREST RATES

Question 27

(Basic Principles of Personal Finance) Be a responsible borrower who repays as promised, showing you are worthy of getting credit in the future.

Answer 27

DON'T BORROW WHAT YOU CAN'T REPAY

Question 28

(Basic Principles of Personal Finance) An annual budget to identify expected income and expenses, including savings, will help you live within your income.

Answer 28

BUDGET YOUR MONEY

Question 29

(Basic Principles of Personal Finance) Recognize that no one will pay you high interest rates on a sure thing. Diversification of assets is the best protection against risk

Answer 29

HIGH RETURNS EQUAL HIGH RISKS

Question 30

(Basic Principles of Personal Finance) Take time to list your financial goals, along with a realistic plan for achieving them.

Answer 30

MAP YOUR FINANCIAL FUTURE

Question 31

(Basic Principles of Personal Finance) Be aware that credit bureaus maintain credit reports, which record borrowers' histories of repaying loans. Negative information in credit reports can affect your ability to borrow at a later point.

Answer 31

YOUR CREDIT PAST IS YOUR CREDIT FUTURE

Question 32

(Basic Principles of Personal Finance) Purchase insurance to avoid being wiped out by a financial loss, such as an illness or accident

Answer 32

STAY INSURED