Personal Finance Final Review
1. List the seven Baby Steps in Dave Ramsey’s financial plan.
2. Explain the three basic reasons for saving money.
3. Identify three benefits of having an emergency fund.
4. Explain the concept of compound interest.
5. Explain the KISS rule of investing.
6. Examine the relationship between diversification and risk.
7. Briefly describe the different types of investments: money markets, bonds, single stocks, mutual funds, rental real estate and annuities. Which does Dave recommend?
8. What is the difference between a traditional IRA and a Roth IRA?
9. What is the difference between credit cards and debit cards?
10. How does the debt snowball work?
11. What is “opportunity cost”?
12. List the five steps to help you make a significant purchase buying decision.
13. Why isn’t your credit score a scorecard on how you are doing financially?
14. Describe some precautions that will protect you from identity theft.
15. Why don’t some people create a budget?
16. What are the benefits of a budget?
17. What is a zero based budget?
18. What are the seven rules of negotiating?
19. List three places to find great deals.
20. What is the difference between commissions and allowances?
21. Describe the general differences that exist between men and women as they relate to money.
22. Why is it important to do a budget together when you are married?
23. Explain the various types of taxes withheld from your paycheck.
24. Explain why insurance is an essential part of a healthy financial plan.
25. Briefly describe the seven basic types of insurance coverage needed: homeowner’s, renter’s, auto, health, disability, life, and long-term care.
26. What is the difference between term and cash value life insurance. Which does Dave recommend?
27. What are the advantages of renting? Disadvantages?
28. What are the advantages of buying? Disadvantages?
29. Compare and contrast a 15-year mortgage to a 30-year mortgage.