Key Principles of Personal Finance Management

What is the main focus of achieving long-term financial stability?

• Clipping coupons

• Scoring flights with credit card miles

• A holistic approach

• Skipping morning lattes

When budgeting, what should you focus on to save more money?

• Small daily expenses

• Grocery bills

• Big-ticket items

• Entertainment costs

How much could you potentially save by buying a pre-owned car instead of a new one?

• $5,000

• $10,000

• $18,000

• $25,000

What is a helpful strategy when setting savings goals?

• Ignoring your progress

• Saving randomly

• Being vague about your plan

• Setting specific subgoals

What type of debt should you avoid?

• Student loans

• Low-interest mortgage

• Business loans

• Credit card debt with interest over 5%

What is one way to reduce your taxable income?

• Avoid all forms of income

• Receive income in a tax-exempt form

• Spend all your money

• Make less money

Why should you avoid insurance for small valuables?

• Insurance premiums are too high

• Small valuables are not worth insuring

• It can be a waste of money if you can afford to replace them

• Insurance is always necessary

What is the purpose of insurance?

• To protect you in unfortunate scenarios

• To avoid all risks

• To make regular payments

• To increase your expenses

What is a key benefit of investing for retirement?

• No risk

• Immediate returns

• Guaranteed profits

• Compound interest

What can potentially help your investments compound faster?

• Avoiding all investments

• Contributing to retirement accounts like 401(k)s and IRAs

• Saving in a regular bank account

• Spending all your money