Dave Ramsey- Chapter 1 Question and Answers Rated A+

Dave Ramsey- Chapter 1 Question and Answers Rated A+ What is personal finance? All of the decisions and activities of an individual or family regarding their money; including spending, saving, budgeting, etc. What is a loan? A debt evidenced by a "note" which specifies that principal amount, interest rate and date of repayment What is interest? A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as the percentage of the principal (original loan amount) What is financial literacy? The knowledge and skill set necessary to be an informed consumer and manage finances effectively What is economy? A system by which goods and services are produced and distributed What is debt? An obligation of repayment owed by one party (the debtor/borrower) to the second party (the creditor/lender); in most cases this included repayment of the original ban plus interest What is credit? The granting of a loan and the creation of debt; any form of deferred payment What is the consumer? A person or organization that uses a product or service What are the key components of financial success? 1. Access your financial situation 2. Set money goals 3. Write out a detailed plan for accomplishing your goals 4. Write down your plan 5. Know your money personality 6. Regularly monitor and reassess your financial plan 7. Replace money myths with money truths When were credit laws relaxed and why? After 1917 and before 1929. This was to normalize the use of Credit Cards and have owners pay to the banks