Dave Ramsey - Chapter 1 & 2

Front

What is a liability?

Back

A liability is money you owe; a debt.

Front

What is the best way to buy a car?

Back

The best way to buy a car is to save up and pay cash for a used car in your price range.

Front

What allows invested money to grow over time?

Back

Compound Interest allows invested money to grow over time.

Front

What is the First Foundation in Dave Ramsey's plan?

Back

The First Foundation is to save a $500 emergency fund.

Front

What does personal finance refer to?

Back

Personal finance refers to all the money decisions a person or family must make in order to earn, budget, save, and spend money over time.

Front

What is an emergency fund?

Back

An emergency fund is money set aside to cover unexpected expenses.

Front

What is the purpose of budgeting?

Back

The purpose of budgeting is to plan how to spend your money wisely.

Front

What is the difference between saving and investing?

Back

Saving is setting aside money for short-term goals, while investing is using money to earn a return over the long term.

Front

What is compound interest?

Back

Compound interest is interest calculated on the initial principal and also on the accumulated interest from previous periods.

Front

Why is it important to avoid debt?

Back

Avoiding debt is important because it helps you maintain financial freedom and reduces financial stress.