CONSUMER DECISIONS FINAL REVIEW

CONSUMER DECISIONS FINAL REVIEW

1. Define values and give an example. Principle or qualities that you find worthwhile or desirable 2. Define goal. Something to work for or achieve 3. Give 2 examples of wants. Sports car, beach house 4. Give 2 examples of needs. Food, shelter, school supplies

5. List two advantages of using credit. Expensive items Emergencies Convenience Build credit history

6. List three types of check endorsements: Blank – your signature Restrictive – “for deposit only” and signature Special – write “pay to the order of…” and their “name” and then sign your name 7. Give 3 reasons why people use budgets. - to reach goals - to help save - to live within or beneath your means - to watch your money flow: how and where you are spending your money - to stop impulse buying 8. What was the main idea in Who Moved My Cheese? To learn to look for change and to become flexible and like change. 9. What three things did you learn from Who Moved My Cheese?

10. Name the three C’s of credit. Capital, character, capacity

11. What is the main idea of a balanced life? To organize goals and lifestyle to prevent overload in one area of life or to handle stress better. 12. What does buffer zone mean? Tell three of your own buffer zones. The space between yourself and your limits. 13. What can be some costs of using credit? Finance charge, annual fee, interest rates, and late charges

14. How do savings become investments? They earn more money, interest or dividends

15. Define credit. The provision of money, goods, or services at the present in exchange for the promise of future payment.

16. True or False. It is easier to save when you have a financial goal. TRUE 17. Explain the latte factor. Being aware of the small everyday expenses that will add up over a week, a month, a year to 10 years & cost you a lot of money. Ex. Spending $1.85 each day on coffee, or money on cigarettes.

18. Who uses more credit young or old families? Young, More expenses and usually less money. 19. True or False. Signing another person’s name to a check is an example of forgery. TRUE 20. List the two main groups of expenses. Flexible or Fixed expenses

21. If your budget is fantastic and working now, do you ever have to revise it? Yes, your life situations change 22. How much should you save from all of your income and especially from your paycheck? At a minimum of 10% for men and 12% for women 23. What does the Dow Jones tell you? How the market is doing that day, is it up or down. 24. True or False. When you invest in stocks, typically you are in for the LONG TERM. TRUE

25. How do you choose a stock? Buy what you know, research and decide, get expert advice.

26. What is diversification? When you invest you should spread your money around in different accounts. (Don’t put your eggs all in one basket.) 27. What is a bull market? When the stock market is up. 28. What is compound interest? Interest earning interest. 29. Define SMART and use it for a financial goal. S- Specific: Save 12% each pay. M-Measurable: Save $141.00 each pay. A-Attainable: Have it automatically deposited into savings account. R-Realistic: 12%/$141.00 is a small amount twice a month. T-Time bound: Start now 5-24-12.

30. List another name for take home pay. Net income 31. When playing the stock market game (SMG), how many stocks must you buy? 100 stocks minimum 32. TRUE- FALSE. Stocks that pay dividends are called value stocks. FALSE. The answer is income stocks. 33. What does “Confirm trade” mean? This tells you that your transaction will be processed once you click “Confirm trade”. 34. What is human capital? Human capital is anything that benefits or increases your personal attributes. Ex. doctorate, or good nutrition or reading

35. What is disposable income? Disposable income is the income that is available to an individual after their bills are paid. Money left after taxes. 36. Where are NASDAQ and NYSE in relation to the ticker tape? NYSE if on the top line and NASDAQ is found on the bottom line.

37. True or False. A net worth statement is also known as a personal balance sheet. TRUE

38. What are two payroll deductions that are taken from your pay that is not an option? Social security and Medicare

39. What do the letters “YTD” stand for on your paycheck statement? Year to Date

40. Explain what a credit union is & who may use it. Credit union is a financial institute whose members share a common bond such as a union or professional association.

41.Emergency fund should be for _____6____ to ____9_____ months of fixed income to cover your expenses.

42. Explain the purpose of the “Rule of 72”. “Rule of 72” tells you how long it takes your money to double.

43. The letters FDIC are stand for: Federal Deposit Insurance Corporation Each account is insured up to $250,000.00.

44. What are the 3 entities that can issue a bond? Government, municipalities, companies

45. In 1978, an act was passed to allow individuals to save for retirement is The Tax Reform Act.

 46. The interest in savings accounts is known as compounding interest.

What does this mean to a person with a savings account? Interest earning interest