Financial recovery - notes PDF

Preview

Summary

notes...

Description

●

Question 1 ●

●

●

●

●

What first step should Dr. Street take before developing a financial recovery plan? ●

●

●

Selected Answer:

● ●

Answers:

● ●

● ● ●

10 out of 10 points

●

●

●

●

●

●

A.

Evaluate his current financial situation and track his spending A.

Evaluate his current financial situation and track his spending

● ●

File for bankruptcy

B.

● ●

Develop a budget

● ●

Take out a payday loan

C. D.

● ●

Respons ● e Feedbac k:

That is correct. Dr. Street should track his spending with a Monthly Income and Expense Worksheet and evaluate his current financial situation before developing a financial recovery plan.

● ●

Question 2 ●

●

●

●

●

All of the following are things to consider to increase your income EXCEPT: ●

●

Selecte ● d ● Answer:

A.

Sell a kidney. These are in high demand, so you could make some serious money (and you can survive with only one of your two kidneys).

10 out of 10 points

●

●

●

●

●

●

●

Answer ● s: ●

● ●

●

A.

Sell a kidney. These are in high demand, so you could make some serious money (and you can survive with only one of your two kidneys).

● ●

B.

● ●

C.

● ●

D.

Take on a part-time job (or an additional part-time job). Seek unemployment assistance if you're unemployed and not already receiving assistance.

Sell your assets (e.g., a vehicle, furniture, jewelry, or your home).

● ●

Response ● Feedback:

That is correct. Giving up an organ is a highly risky proposal, and selling one is illegal in most areas.

● ●

Question 3 ●

●

●

●

●

If you believe you are a victim of identity theft, the Federal Trade Commission (FTC) recommends you take all of the following actions immediately EXCEPT: ●

●

●

●

Selecte ● d ● Answer:

Answer ● s: ●

● ●

A.

Track down the person who stole your identity and urge them to stop or turn themselves in to authorities. A.

Track down the person who stole your identity and urge them to stop or turn themselves in to authorities. B.

File a report with your local police, and get a copy of the report.

10 out of 10 points

●

●

●

●

●

●

●

●

● ●

C.

● ●

D.

Contact your creditors about any accounts that have been changed or opened fraudulently. Ask to speak with someone in the security or fraud department.

Use the Identity Theft Affidavit available at http://www.ftc.gov/idtheft

● ●

Respons ● e Feedbac k:

That is correct. Many of the people who are identity thieves are very dangerous and could do harm to you should you confront them. Provide any relevant information you may have to law enforcement and then trust them to do their jobs to the best of their abilities.

● ●

Question 4 ●

●

●

●

●

Tips for rebuilding your savings include all of the following EXCEPT: ●

●

Selecte ● d ● Answer:

●

Answer ● s: ●

● ●

●

● ●

●

● ●

●

●

A.

Skip paying a different bill each month and put that money into savings instead. A.

Skip paying a different bill each month and put that money into savings instead. B.

Consider having your paycheck direct deposited into your bank account. C.

Make extra monthly payments to yourself (into your savings) once you have paid off a credit card or loan. D.

Take advantage of any matching contributions your employer makes into a retirement account.

10 out of 10 points

●

●

●

●

●

●

●

Respons ● e Feedbac k:

That is correct. Skipping payments only puts off spending the money and can lead to negative ratings on your credit report or loss of collateral (e.g., car or home). The other tips help you to increase savings or reduce spending (which should increase the amount you can save).

● ●

Question 5 ●

●

●

●

●

You should be wary of a credit counseling agency that requests a large upfront fee before doing any work. ●

●

●

Selected Answer:

●

Answers:

●

10 out of 10 points

●

●

●

●

●

●

True

True ●

●

False

● ●

Respons ● e Feedbac k:

That is correct. You should always be ware of a credit counseling agency that requests a large upfront fee before they do any work.

● ●

Question 6 ●

●

●

●

●

When creating your financial goals (or any other type of goals), you should make sure that your goals are SMART. ●

●

●

Selected Answer:

●

Answers:

●

True

True ●

●

False

10 out of 10 points

●

●

●

●

●

●

● ●

Respons ● e Feedbac k:

That is correct. Any goals created should be SMART: Specific, Measurable, Achievable, Relevant, Time-based.

● ●

Question 7 ●

●

●

●

●

When prioritizing your spending, what is the best order in which you should pay your expenses? ●

●

Selected Answer:

● ● ● ● ●

●

Answers: ● ● ● ● ●

●

● ● ● ● ●

●

● ● ● ● ●

A.

1. Basic necessities 2. Other high-priority expenses (e.g., insurance premiums and medical expenses) 3. Creditors or lenders 4. Yourself (savings) A.

1. Basic necessities 2. Other high-priority expenses (e.g., insurance premiums and medical expenses) 3. Creditors or lenders 4. Yourself (savings) B.

1. Yourself (savings) 2. Basic necessities 3. Other high-priority expenses (e.g., insurance premiums and medical expenses) 4. Creditors or lenders C.

1. Creditors or lenders 2. Yourself (savings) 3. Basic necessities 4. Other high-priority expenses (e.g., insurance premiums and medical expenses)

10 out of 10 points

●

●

●

●

●

●

● ●

●

● ● ●

D.

1. Other high-priority expenses (e.g., insurance premiums and medical expenses) 2. Creditors or lenders 3. Yourself (savings) 4. Basic necessities

● ●

Respons ● e Feedbac k:

That is correct. You should always pay for your basic necessities before paying other expenses or creditors. Pay your high-priority expenses after paying your basic necessities. Prioritize any remaining expenses based on the money you have left each month (first pay your creditors or lenders and then contribute to your savings).

● ●

Question 8 ●

●

●

●

●

A __________ is a step-by-step plan for meeting expenses and financial goals in a given period of time. ●

●

●

Selected Answer:

● ●

Financial Plan

Answers:

● ●

Budget

● ●

●

D.

A.

● ●

B.

● ●

C.

● ●

D.

Savings Plan Recovery Plan Financial Plan

● ●

Respons ● e Feedbac k:

● ●

Question 9

That is incorrect. A budget is a step-by-step plan for meeting expenses and financial goals in a given period of time.

0 out of 10 points

●

●

●

●

●

●

●

●

●

●

●

A budget is a step-by-step plan for meeting expenses and financial goals. Budgets are useful for large groups like governments and companies, but not for individuals or families. ●

●

Selected Answer:

●

●

Answers:

●

●

0 out of 10 points

●

●

●

●

●

●

True True

● False ●

●

Respons ● e Feedbac k:

That is incorrect. A budget can help you know what your income and expenses are every month and help you make choices about how to use your money.

● ●

Question 10 ●

●

●

●

●

You should wait until all of your debts are paid off before you begin to ● rebuild your savings.

●

●

●

●

●

● ●

Selected Answer:

●

●

Answers:

●

●

True True

● False ●

●

●

0 out of 10 points

Respons ● e Feedbac k:

That is incorrect. You should incorporate rebuilding your savings into your financial recovery plan. This allows you to pay for extra or emergency expenses without disrupting or derailing your recovery plan.

●

Question 1 ●

●

●

●

●

In order to have an effective budget, you must use a computer spreadsheet system. ●

●

●

Selected Answer:

●

Answers:

●

●

10 out of 10 points

●

●

●

●

●

●

False True

● False ●

●

Respons ● e Feedbac k:

That is correct. There are several inexpensive and/or low-tech budgeting tools such as an Expense Envelope System, a Budget Box System, and a Monthly Payment Schedule or Calendar.

● ●

Question 2 ●

●

●

●

●

You should wait until all of your debts are paid off before you begin to rebuild your savings. ●

●

●

Selected Answer:

●

Answers:

●

●

False True

● False ●

●

Respons ● e Feedbac k:

That is correct. You should incorporate rebuilding your savings into your financial recovery plan. This allows you to pay for extra or emergency expenses without disrupting or derailing your recovery plan.

10 out of 10 points

●

●

●

●

●

●

● ●

Question 3 ●

●

●

●

●

When prioritizing your spending, what is the best order in which you should pay your expenses? ●

●

Selected Answer:

● ● ● ● ●

●

Answers: ● ● ● ● ● ● ● ● ●

●

● ●

●

A.

1. Basic necessities 2. Other high-priority expenses (e.g., insurance premiums and medical expenses) 3. Creditors or lenders 4. Yourself (savings) A.

1. Basic necessities 2. Other high-priority expenses (e.g., insurance premiums and medical expenses) 3. Creditors or lenders 4. Yourself (savings) B.

1. Yourself (savings) 2. Basic necessities 3. Other high-priority expenses (e.g., insurance premiums and medical expenses) 4. Creditors or lenders

● ● ● ● ●

C.

● ●

D.

● ● ●

1. Creditors or lenders 2. Yourself (savings) 3. Basic necessities 4. Other high-priority expenses (e.g., insurance premiums and medical expenses)

1. Other high-priority expenses (e.g., insurance premiums and medical expenses) 2. Creditors or lenders 3. Yourself (savings) 4. Basic necessities

● ●

Respons ● e Feedbac

That is correct. You should always pay for your basic necessities before paying other expenses or creditors. Pay your high-priority expenses after

10 out of 10 points

●

●

●

●

●

●

k:

paying your basic necessities. Prioritize any remaining expenses based on the money you have left each month (first pay your creditors or lenders and then contribute to your savings).

● ●

Question 4 ●

●

●

●

●

A __________ is a step-by-step plan for meeting expenses and financial goals in a given period of time. ●

●

●

Selected Answer:

● ●

Budget

Answers:

● ●

Budget

● ● ●

10 out of 10 points

●

●

●

●

●

●

A.

A.

● ●

B.

● ●

C.

● ●

D.

Savings Plan Recovery Plan Financial Plan

● ●

Respons ● e Feedbac k:

That is correct. A budget is a step-by-step plan for meeting expenses and financial goals in a given period of time.

● ●

Question 5 ●

●

●

●

●

If you believe you are a victim of identity theft, the Federal Trade Commission (FTC) recommends you take all of the following actions immediately EXCEPT: ●

●

Selecte ● d

A.

10 out of 10 points

●

●

●

●

●

●

Answer: ●

●

Answer ● s: ●

●

●

●

Track down the person who stole your identity and urge them to stop or turn themselves in to authorities. A.

Track down the person who stole your identity and urge them to stop or turn themselves in to authorities.

● ●

B.

● ●

C.

● ●

D.

File a report with your local police, and get a copy of the report. Contact your creditors about any accounts that have been changed or opened fraudulently. Ask to speak with someone in the security or fraud department.

Use the Identity Theft Affidavit available at http://www.ftc.gov/idtheft

● ●

Respons ● e Feedbac k:

That is correct. Many of the people who are identity thieves are very dangerous and could do harm to you should you confront them. Provide any relevant information you may have to law enforcement and then trust them to do their jobs to the best of their abilities.

● ●

Question 6 ●

●

●

●

●

A credit counseling agency can do all of the following EXCEPT: ●

●

●

● ●

Selected Answer:

● ●

Pay off your debts

Answers:

● ●

Pay off your debts

A.

A.

● ●

B.

● ●

C.

Help you manage your money and debts Help you develop a budget

10 out of 10 points

●

●

●

●

●

●

● ●

●

D.

Teach you about consumer credit, money and debt management, and budgeting

● ●

Respons ● e Feedbac k:

That is correct. Credit counseling agencies can help you manage your own finances, but they cannot pay off your debts. Be sure you understand their pricing structure, the process they will follow, the results you can expect, and the time frame involved before you sign up with a credit counseling agency.

● ●

Question 7 ●

●

●

●

●

The financial recovery process is typically quick and easy. ●

●

●

Selected Answer:

●

Answers:

●

●

10 out of 10 points

●

●

●

●

●

●

False True

● False ●

●

Respons ● e Feedbac k:

That is correct. The financial recovery process is a slow and steady process. You may experience an occasional setback along the way, but don't get discouraged. You may need to ask for help along the way, but rest assured that you are not alone.

● ●

Question 8 ●

●

●

●

●

When creating your financial goals (or any other type of goals), you should make sure that your goals are SMART. ●

10 out of 10 points

●

●

●

●

●

●

●

●

Selected Answer:

●

Answers:

●

True

True ●

●

False

● ●

Respons ● e Feedbac k:

That is correct. Any goals created should be SMART: Specific, Measurable, Achievable, Relevant, Time-based.

● ●

Question 9 ●

●

●

●

●

What first step should Dr. Street take before developing a financial recovery plan? ●

●

●

Selected Answer:

● ●

Answers:

● ●

● ●

●

A.

Evaluate his current financial situation and track his spending A.

Evaluate his current financial situation and track his spending

● ●

File for bankruptcy

B.

● ●

Develop a budget

● ●

Take out a payday loan

C.

D.

● ●

Respons ● e Feedbac k:

● ●

Question 10

That is correct. Dr. Street should track his spending with a Monthly Income and Expense Worksheet and evaluate his current financial sit...