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CHAPTER 1
Chapter Assessment Review
Guide

Introduction to Personal Finance

Directions: Study the concepts and financial terms below so you'll be ready for the upcoming chapter
assessment.
Vocabulary and Terms to Know and Understand:
Personal Finance
Interest
Loan

20% Knowledge/80% Behavior

Financial Plan/Budget
Cycle of Debt

Concepts to Understand and be able to Explain:

What is Personal Finance? (Page 12)

Why should students learn about personal finance?

Should teenagers begin to manage their money or is that something only adults need to be
concerned about? (Page 12)

What are the key components of personal finance? (Page 13) Who should be making your
money decisions?

What was America's use of credit like before 1917? How was it different than America's use of
credit today? (Page 14)

What makes managing money so difficult? Is it because money is so intellectually complicated

or is it because we have difficulty controlling our behavior? How is this explained in Chap. 1?
(Page 16)

Which is harder, "money math" or "money behavior"?

When people drive really nice cars, live in big houses and wear expensive clothes you can be
sure they are very wealthy - Is that always true??? Is that usually true??? (Page 16)

Are most Americans building wealth and saving for retirement? (Page 17)

What keeps us Americans (people of any age, young and old) from building wealth? (Page 19)

Are most people able to learn enough "money smarts" to manage their day-to-day money
decisions without having to hire a financial planner or an accounting genius? (Page 21)