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1. The value of education is often exaggerated when searching for a good job.
2. The U.S. government provides several types of financial incentives to encourage people to
attend college.
3. About half of the U.S. population accumulates enough money to afford a comfortable
retirement.
4. The first step in getting control of your finances is to prepare a budget.
5. About 35% of U.S. households do not have a retirement account.
6. Your personal balance sheet will reflect the same fundamental accounting equation as the
balance sheet for a business: assets = liabilities + owners' equity.
7. On your personal balance sheet, your assets should include anything of value that you
own.
8. If your personal liabilities exceed your assets, your are on the road to financial security.
9. Your computer and car should both be listed on the asset side of your personal balance
sheet.
10. Credit-card debt represents an asset on a consumer's balance sheet.
11. A major source of revenue on your personal income statement is your salary or wages
from your job.
12. One step toward the goal of taking control of your finances is to keep track of all your
expenses.
13. If you find yourself regularly running out of cash, your only real option is to focus your
attention on finding ways to increase your income.
14. Once you have evaluated your current financial situation and know your sources of income
and expenses, you have reached the point where you can establish a personal budget.
15. One way to motivate yourself to start saving is to visualize your goals and think about how
much money it will take to achieve them.
16. Managing the finances of a household is similar to managing the finances of a small
business.
17. With respect to personal financial planning, the first thing to do with any extra money you
have is to start a savings plan.
18. In order to get in the habit of saving, personal financial advisors suggest that you save first
and wait to pay off any debts until you've accumulated at least $10,000 in cash, savings
accounts, CDs and other liquid assets.
19. It is usually better to use any money left after paying monthly bills to pay off debts that
carry high interest rates rather than putting that money into a savings account.
20. Financial planners regularly suggest that you borrow money to pay for large purchases.
21. The best way to save money is to pay yourself first.
22. Most financial experts will tell you to save about one month's earnings for contingency
purposes.
23. Borrowing money for ordinary expenses is a necessary part of life.
24. Your big-screen HDTV would be listed as an asset on your personal balance sheet.
However, the loan you took out to buy the TV would be listed as a personal liability.
25. Listing all of your personal assets is the first step in preparing your own income
statement.
26. Tracking business and personal spending by categories is an important technique to
control expenditures.
27. Your personal budget is the same thing as your personal income statement.
28. Financial planners encourage individuals to borrow only to cover immediate expenses.
29. For individuals, budgets are usually more trouble than they are worth.
30. A good way to save money is to spend all of your regular income, but have a strict rule to
put any money from unexpected or unusual sources (such as overtime pay, bonuses, gifts,
gambling payouts, or contest prizes) into a savings account.
31. You should never borrow to cover regular expenses, but it makes perfectly good sense to
use credit to cover unexpected expenses such as car or home repairs.
32. LaTasha is attending her local community college so she can get a good job. She knows
that financial planning begins first with making money.
33. Henri wants to get better control of his personal finances. He should begin by setting up
a personal balance sheet and a personal income statement.
34. Even though they are in debt, most of today's college graduates are capital-rich.
35. Most people find it relatively easy to live frugally.
36. In order to accumulate enough wealth to get started toward achieving their goals many
people have to make significant sacrifices in their standard of living for several years.
37. Once they've accumulated enough money, buying a low-priced home is often a good
investment for young adults.
38. Personal financial planners recommend renting a home, rather than incurring the cost of
buying a home.
39. Before getting married, a couple should discuss and agree upon a financial strategy.
40. After marriage, one great financial strategy is to live on one income and to save the other.
41. If possible, it is almost always better to buy a single home rather than a duplex.
42. One drawback to buying a home compared to renting is that your monthly mortgage
payments will increase, while rental payments are fixed.
43. When you buy a home, the monthly payments for the home may remain relatively fixed, but
your payments for taxes and utilities are likely to increase.
44. Interest paid on a home loan is deductible from taxable income.
45. The federal government discourages home ownership through high tax rates.
46. The three factors that have the greatest influence on how the value of your home
increases over time are: (1) size (square feet), (2) age, and (3) design features.
47. From an investment viewpoint, it is a good idea to buy a large home in an area of town
where homes are less expensive.
48. Historically, the best place to invest has been in U.S. government savings bonds.
49. Most financial experts believe that the stock market is likely to grow more slowly in the
future than it did in the last 50 years.
50. Though stock prices do sometimes go down, investing in the stock market has generally
provided very attractive returns over the long run.
51. A contrarian would advise you to buy stock when stock prices are falling and most other
people are selling.
52. Funds invested in savings accounts and certificates of deposit (CDs) have traditionally
outperformed stocks as a means of generating long-term financial gains.
53. A person using a credit card to make a purchase may end up paying much more than if he
or she had paid cash.
54. A good manager of personal finances, like a good businessperson, uses borrowed funds
whenever possible.
55. If you use a credit card to make purchases, you should make a strong effort to pay off the
balance in full each month.
56. Credit cards can be used to categorize and track your purchases.
