Personal Finance Ch 1

Consumer
A person or organization that buys/uses goods or services
Financial literacy
The knowledge and skill set necessary to be an informed consumer and manage finances effectively
Credit
The granting of a loan and the creation of a debt; any form of deferred payment
Loan
A debt evidence by a “note: which specifies the principle amount, interest rate and date of repayment (example: house mortage)
Debt
An obligation of repayment owed by one party (debtor/borrower) to a second party (creditor/lender)
Interest
A fee paid by a borrower to the lender for the use of borrowed money
Economy
A system by which goods and services are produced and distributed
Personal Finance
All of the decisions and activities of an individual or family regarding the money, including spending, saving, budgeting. etc
Learning the language of money is not that important because you will be able to depend on finical planners to manage your money?
False
Which of the following is NOT a reason credit is marketed so heavily to consumers in the United States?
The use of credit is not socially accepted in the United States.
During the Great Depression, New Deal policy makers came up with mortgage (home loans) and consumers lending policies that convinced commercial banks that?
Consumers credit could be profitable
Describe some of the mistakes americans often make when it comes to money?
Getting loans, buying things they can’t afford, going onto debt.
Explain why understanding your money personality is important when it comes to developing a money plan thats right for you
Savers will generally have less work to do and won’t need as much discipline as spenders, who will have to slowly ween themselves off of their disdainful habits.
Does the history of credit and consumerism segment make you view the use of credit differently then you did before?
Yes, because i now know that i shouldn’t just charge every things i buy on a credit card and should only buy something if i have the cash
Explain how marketing can affect your decisions when it comes to spending money?
marketing affects where and how we spend pour money through advertisements; it can encourage us to buy now and pay later
does managing you money all mean that you can’t have fun with your money
No, you can always budget some money for fun activities