Personal Financial Management and Planning Quiz

Maintaining a positive financial balance by ensuring expenses are lower than income.

Setting a financial plan to control and manage expenditures.

A financial cushion reserved for unforeseen costs, providing security and preventing debt.

A tax-advantaged account designed for long-term retirement savings.

Providing financial security for dependents in the event of the policyholder's untimely death.

A retirement savings account with tax advantages to encourage individuals to save for retirement.

Outlining posthumous asset distribution preferences and ensuring a clear inheritance plan.

A measure of the profitability of an investment, indicating the return relative to its cost.

An easily convertible asset into cash, providing financial flexibility.

The annual cost of borrowing, including interest and fees, expressed as a percentage.

FICO score factors exclude income level, focusing on credit history, utilization, length, types of credit, and recent inquiries.

Spreading investments across various asset classes to reduce risk and enhance overall portfolio stability.

A strategy of consistent investment, buying more shares during market lows and fewer during highs to average out costs.

A debt reduction approach focusing on clearing smaller debts first, gaining momentum to tackle larger ones.

A quick formula to estimate the time required for an investment to double based on a fixed annual rate of return.

Acknowledging the impact of inflation and the potential for money to grow or lose value over time.

Contrasting tax advantages between retirement accounts, with traditional IRAs offering tax deductions and Roth IRAs featuring tax-free withdrawals.

Assessing how quickly assets can be turned into cash without substantial depreciation.