Understanding Money Matters

What is a loan?

• A loan is an investment that guarantees profit.

• A loan is a gift that does not need to be repaid.

• A loan is a type of insurance policy.

• A loan is borrowed money that must be repaid with interest.

What does credit mean?

• Credit means the ability to borrow money or access goods/services with a promise to pay later.

• Credit is the total amount of money in a bank account.

• Credit means the ability to pay cash for goods and services.

• Credit refers to a type of insurance policy.

Why is saving money important?

• Saving money is only for the wealthy.

• You should spend all your money immediately.

• Saving money is important for financial security and achieving future goals.

• Saving money is unnecessary for anyone.

What is debt?

• Debt is a type of investment.

• Debt is money that is given away as a gift.

• Debt is an asset that increases in value.

• Debt is money that is borrowed and must be repaid.

What does it mean to delay a payment?

• To postpone the due date of a payment.

• To make a payment earlier than scheduled.

• To cancel a payment entirely.

• To increase the amount of a payment.

How does income affect your spending?

• Income has no effect on spending habits.

• Higher income decreases spending capacity.

• Higher income generally leads to increased spending capacity.

• Lower income leads to increased spending capacity.

What is an exit strategy in finance?

• An exit strategy is a plan for how an investor or business owner will sell their investment or business stake.

• A plan for diversifying a portfolio

• A strategy for minimizing taxes on investments

• A method for increasing investment returns

How can you avoid getting into debt?

• Create a budget and live within your means.

• Take out loans for unnecessary purchases

• Ignore your expenses

• Spend more than you earn

What are some ways to save money?

• Buying luxury items on credit

• Ignoring bills and expenses

• Budgeting, cutting subscriptions, shopping with a list, using coupons, and automatic savings.

• Investing in high-risk stocks

Why should you check your credit score?

• To understand your creditworthiness and identify any errors or potential identity theft.

• To determine your income level

• To apply for a new credit card

• To increase your chances of getting a loan