Personal Finance Concepts and Principles

Front

What are common reasons people don't save money?

Back

Lack of discipline, not living on a budget, lack of focus.

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal x Rate x Time.

Front

If Debra deposits $2500 at 7% simple interest, how long will it take to reach $3900?

Back

8 years.

Front

What percentage of personal finance is behavior and what percentage is knowledge?

Back

80% behavior and 20% knowledge.

Front

What is a budget?

Back

A budget is a plan that outlines expected income and expenses over a specific period.

Front

What is the difference between needs and wants?

Back

Needs are essential for survival (food, shelter), while wants are non-essential (luxuries, entertainment).

Front

What is debt?

Back

Debt is money borrowed that must be repaid, often with interest.

Front

What is the impact of high-interest debt?

Back

High-interest debt can lead to financial strain and difficulty in managing expenses.

Front

What is the importance of saving for emergencies?

Back

Emergency savings provide financial security and help avoid debt during unexpected situations.

Front

What is the concept of opportunity cost?

Back

Opportunity cost is the value of the next best alternative foregone when making a decision.