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Basics Beginner: Managing Your Debt

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1.
You will usually have to pay additional costs for the privilege of consolidating your loans.
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True. Take these costs into account before you consolidate loans.
2.
To determine how much you should pay each month on credit card bills, _______.
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Use a financial calculator. Enter the number of months, interest rate, and principal balance to calculate the monthly payment.
3.
Which type of goods usually become worth less over time?
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Consumer goods. Consumer goods are bought to be used up. Investment goods are bought to provide income or appreciation of value.
4.
Which of the following are ways to lower your monthly debt payments?
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All of the above. These are all ways to reduce your monthly debt payments.
5.
When you pay back a loan, the amount of the monthly loan payments is determined by _______.
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All of the above. Principal, interest, and the term (months) of the loan determine how much each monthly payment should be.
6.
If you are in debt, why is it important to first deal with the causes of the debt?
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It can prevent them from recurring. Though not guaranteed to, there is a good chance you can prevent future occurrences.
7.
If you file for bankruptcy, the bankruptcy will stay on your credit record for _______ years.
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10. After 10 years, it will disappear.
8.
Your recurring monthly debt payments (such as credit cards) should be considered _______ in your budget.
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Ghosts of prior expenses. Although you may pay them every month, they are not current expenses. They are remnants of past expenses that you must pay off over time.