Ch 2 - SAVING Financial Literacy

At your age, a fully funded emergency fund should be:

Which of these is not a key to saving money?

When a person intentionally invests money in a place where it can earn more money

Your income level greatly affects your saving habits.

Americans typically maintain a very high savings rate.

You should hold off on investing for retirement until you have college or other post-secondary education paid for.

An interest-bearing account is an account that generates interest income on the available balance in the account.

When you’re older and out of school, you’ll need to grow your emergency fund to a full 3 to 6 monthsʹ worth of expense.

Which of the following is a reason that people donʹt save money?

Saving money over time for a large purchase

Using the sinking fund approach, how much do you have to save each month to buy a $4,800 car one year from now?

Why is having a fully funded emergency fund so important when it comes to your financial well-being?

For which of the following should you save?

Which is NOT a reason your emergency fund should be kept in a separate savings account away from your spending $?

Money set aside and left alone for a ʺrainy day.ʺ

The amount you save is determined by how much you have left at the end of the month once bills are paid.

Money today has different buying power than the same amount of money in the future.

Instead of borrowing money for large purchases, you should set money aside in a _________ over time and pay with cash.

Compares after-tax income to the money people spend on a variety of items

When you’re in high school, you won’t have the same emergency expenses as your parents.

The saving habits of Ben and Arthur best illustrate which principle of saving?

The persistent rise in the cost of goods and services.

The first thing you should save for is your retirement fund.

Which of the following is not one of the three basic reasons for saving money?

You should keep your emergency fund in the same account as your spending money.

Interest paid on interest previously earned is called what?

Which of the following steps is the First Foundation?

Saving is about:

You should save money for three basic reasons: emergency fund, purchases, and wealth building.

Why should interest earned not be a factor with your emergency fund?

Percentage paid to a lender for the use of borrowed money, or the percentage earned on invested principal

What does it mean to have a negative savings rate?

The five steps to financial success

Save a $500 emergency fund.

This principle suggests that a certain amount of $ today has different buying power than the same amount in the future.