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Savings Unit (ngpf)
Savings Unit (ngpf)
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Answers
1
In the current market, which of these is a competitive but realistic interest rate on a savings account?
7%
3%
2%
17.99%
2
The stock market historically has returns higher than the rate of inflation.
True
False
3
An easy way to save money from each paycheck is by automatic transfer.
False
True
4
The 50-20-30 rule of budgeting means...
50-Wants, 20-Needs, 30-Savings
50-Savings, 20-Needs, 30-Wants
50-Needs, 20 Savings, 30-Wants
50-Needs, 20-Wants, 30-Savings
5
When's the best time to start saving for retirement?
At age 45, so you have 20 years to save
As soon as you get your first full-time job
Once you're debt free
Right after you pay off your student loans
6
Why is it important to start saving early?
You never know when an emergency will occur & you might need your savings
All of these are true.
You will have to invest more money if you wait to reach the same goal.
Money accrues more interest if saved earlier.
7
The majority of Americans have an adequate emergency fund or sufficient money saved for retirement.
False
True
8
What is impulse shopping?
Comparison shopping for more expensive items
Using your emergency fund to make a purchase
Shopping online instead of in stores
Buying an item without giving it much thought
9
Your emergency fund should be enough to cover ____________ months of expenses.
6-12
2-5
1-3
3-6
10
Generally, a 5-year CD will pay less interest than a 10-year CD.
True
False
11
What's the difference between saving and investing?
Saving is long-term, Investing is short-term
Saving is for retirement, Investing is for your family
Nothing, they're the same thing
Saving is short-term, Investing is long-term
12
Which of these is an example of "keeping up with the Joneses?"
Buying plane tickets for vacation well in advance, to get the best price
Saving for retirement as soon as you graduate
Applying to the top colleges, to see if you'll get accepted
Buying new shoes the day they come out, because others will have them too
13
Which is your best savings option, as long as you don't need access to the money for awhile?
Checking account
Money market account
Certificate of Deposit
Regular savings account
14
What should you consider when selecting a savings account?
All of these
Monthly fees
Interest rate
Ability to withdraw/transfer money
15
What does "living paycheck to paycheck" mean?
Depositing you paycheck into your checking account
Alternating pay periods with your spouse
Not having money saved & paychecks that just cover monthly expenses
Not worrying about moey
16
When selecting a bank you should always chose one that is FDIC insured.
True
False
17
Which type of account allows you to write checks from the account?
Checking accounts and money market accounts
Checking accounts only
Online savings accounts
Checking accounts, online savings accounts and money market accounts
18
A good rule of thumb for saving is to save 20% of your income from each paycheck.
True
False
19
It is difficult to open a savings account, you typically need at least $1,000 for your initial deposit.
True
False
20
Which best describes the difference between saving & investing?
Saving goes into a bank, Investing goes into stocks and bonds
Saving = small amounts of money, Investing = large amounts of money
Saving protects your money from inflation, Investing does not
Saving is for low-income people, Investing is for rich people
