CONSUMER DECISIONS FINAL REVIEW

1. CONSUMER DECISIONS FINAL REVIEW

2. CONSUMER DECISIONS FINAL REVIEW • 1. Define values and give an example. • Principle or qualities that you find worthwhile or desirable • Define goal. • Something to work for or achieve • Give 2 examples of wants. • Sports car, beach house • Give 2 examples of needs. • Food, shelter, school supplies • List two advantages of using credit. • Expensive items • Emergencies • Convenience • Build credit history

3. List three types of check endorsements: • Blank – your signature • Restrictive – “for deposit only” and signature • Special – write “pay to the order of…” and their “name” and then sign • your name • Give 3 reasons why people use budgets. • - to reach goals • - to help save • - to live within or beneath your means • - to watch your money flow: how and where you are spending your • money • - to stop impulse buying • What was the main idea in Who Moved My Cheese? • To learn to look for change and to become flexible and like change. • 9. What three things did you learn from Who Moved My Cheese?

4. 10. Name the three C’s of credit. • Capital, character, capacity • 11. What is the main idea of a balanced life? • To organize goals and lifestyle to prevent overload in one • area of life or to handle stress better. • 12. What does buffer zone mean? Tell three of your own • buffer zones. • The space between yourself and your limits. • 13. What can be some costs of using credit? • Finance charge, annual fee, interest rates, and late • charges • 14. How do savings become investments? • They earn more money, interest or dividends • 15. Define credit. • The provision of money, goods, or services at the present in • exchange for the promise of future payment.

5. 16. True or False. It is easier to save when you have a financial goal. • TRUE • 17. Explain the latte factor. • Being aware of the small everyday expenses that will add up over a • week, a month, a year to 10 years & cost you a lot of money. • Ex. Spending $1.85 each day on coffee, or money on cigarettes. • 18. Who uses more credit young or old families? • Young, More expenses and usually less money. • 19. True or False. Signing another person’s name to a check is an • example of forgery. • TRUE • 20. List the two main groups of expenses. • Flexible or Fixed expenses

6. 21. If your budget is fantastic and working now, do you ever • have to revise it? • Yes, your life situations change • 22. How much should you save from all of your income and • especially from your paycheck? • At a minimum of 10% for men and 12% for women • 23. What does the Dow Jones tell you? • How the market is doing that day, is it up or down. • 24. True or False. When you invest in stocks, typically you are • in for the LONG TERM. • TRUE • 25. How do you choose a stock? • Buy what you know, research and decide, get expert advice.

7. 26. What is diversification? • When you invest you should spread your money around in • different accounts. (Don’t put your eggs all in one basket.) • 27. What is a bull market? • When the stock market is up. • 28. What is compound interest? • Interest earning interest. • 29. Define SMART and use it for a financial goal. • S- Specific: Save 12% each pay. • M-Measurable: Save $141.00 each pay. • A-Attainable: Have it automatically deposited into savings • account. • R-Realistic: 12%/$141.00 is a small amount twice a month. • T-Time bound: Start now 5-24-12.

8. 30. List another name for take home pay. • Net income • 31. When playing the stock market game (SMG), how many stocks • must you buy? • 100 stocks minimum • 32. TRUE- FALSE. Stocks that pay dividends are called value • stocks. • FALSE. The answer is income stocks. • 33. What does “Confirm trade” mean? • This tells you that your transaction will be processed once you • click “Confirm trade”. • 34. What is human capital? • Human capital is anything that benefits or increases your • personal attributes. Ex. doctorate, or good nutrition or reading

9. 35. What is disposable income? • Disposable income is the income that is available to an • individual after their bills are paid. Money left after taxes. • 36. Where are NASDAQ and NYSE in relation to the ticker tape? • NYSE if on the top line and NASDAQ is found on the bottom • line. • 37. True or False. A net worth statement is also known as a • personal balance sheet. • TRUE

10. 38. What are two payroll deductions that are taken from your pay • that is not an option? • Social security and Medicare • 39. What do the letters “YTD” stand for on your paycheck statement? • Year to Date • 40. Explain what a credit union is & who may use it. • Credit union is a financial institute whose members share a • common bond such as a union or professional association.

11. Emergency fund should be for _____6____to ____9_____months of fixed income to cover your expenses. • 42. Explain the purpose of the “Rule of 72”. • “Rule of 72” tells you how long it takes your money to double. • 43. The letters FDIC are stand for: • Federal Deposit Insurance Corporation • Each account is insured up to$250,000.00.

12. 44. What are the 3 entities that can issue a bond? • Government, municipalities, companies • 45. In 1978, an act was passed to allow individuals to save for • retirement is • The Tax Reform Act. • 46. The interest in savings accounts is known as • compounding interest. • What does this mean to a person with a savings account? • Interest earning interest