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Ramsey Classroom Chapter 3: Saving Money Flashcards | StudBud
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Ramsey Classroom Chapter 3: Saving Money
Ramsey Classroom Chapter 3: Saving Money
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1
In order to outpace inflation when investing, investments should have a lower rate of return than the rate of inflation.
False
True
2
The interest rate on a savings account determines...
How much money you need to have to open the account
How much you will pay the bank to manage the account
How quickly your money will grow over time
The amount of time your money will be in the account
3
Once you have a $500 emergency fund, you should...
Invest it in the stock market to grow your money
Use the moenty to pay for health insurance
Start putting it toward debt
Save it until you have an emergency
4
What is the goal of an emergency fund?
To have cash on hand for unexpected events
To save for your children's college expenses
To pay for large purchases
To pay for Health Insurance
5
Why do stores rarely advertise the full price of big purchases like smartphones?
They are trying to keep their prices competitive
They are trying to cheat you
Hiding the full price allows stores to change pricing as market fluctuates
By only showing you the monthly pymt they make the product seem affordable
6
47% of Americans have less than $1,000 saved for a(n)...
Emergency
Car
Retirement Fund
New smartphone
7
If you really want to save money, you've got to...
Have a financial advisor
Live on less than you make
Fly economy class
Invest in a Roth IRA
8
Compound interest is earned at a fixed rate, while ________ is an average based on an investment's past performance.
The Fifth Foundation
Interest Rate
Compound Growth
The principal
9
Which of these would count as a legitimate reason to use your emergency fund?
The smartphone you want just went on sale
You forgot to budget your mom's birthday gift
Your car battery died
You have an event coming up but you already spent your budgeted clothing $
10
The purpose of an emergency fund is to...
Teach you discipline - saving is self-control
Have some extra $ in checking incase you need to transfer
Be able to cover unexpected exp and protect you from debt
Teach you how to invest in growth stock mutual funds
11
While saving money isn't easy at first, it will make your life a lot______ in the future if you make it a habit.
Either
Harder
Eatier
Easier
12
It's not IF an emergency will happen, but
Why
How
Where
When
13
One of the main reasons we build wealth is so that we can . . .
Spend it all on ourselves
Give to those in need
Impress the people around us
Prove that we are successful
14
The main reasons for saving your hard-earned money are...
Buying gifts, donating to charities, building up college fund for your kids
Investing, indulging, influencing
Emergencies, large purchases and wealth building
Paying for your dream home, buying your dream car, dream vacation
15
You'll have less freedom with your money if you...
Are paying for things in your past
Put money in a bank account
Invest in the stock market
Make less than $35,000
16
Debt is a tool to use to make you wealthy.
False
True
17
Why do some accounts, like savings accounts at your local bank, earn interest?
Because of inflation
Because those accounts always have great interest rates
Because the bank pays you to use your money
Because you deposit money, adding to your principal each month
18
Most millionaires make over $100,000 a year.
False
True
19
What is the Third Foundation
Get out of Debt
Build Wealth and Give
Save a $500 emergency fund
Pay cash for your car
20
The first step you should take when you want to make a large purchase is...
Decide how much you'll need to save and the time frame you want to save it
Sell something and use the proceeds
Get a new credit card
Ask your parents to loan you the money with low interest
21
Which two habits are the most important for building wealth and becoming a millionaire?
Work a high-paying job and rely on a trust fund
Always pay off your credit card on time and putting extra $ in retirement
Invest into the right stocks and use a private CPA
Consistently invest money and patience to give it time to grow
22
Once you're out of school, have started your career, and have zero debt, your emergency fund should have _________.
$3000
3-6 months of living expenses
$5000
3-6 months of income
23
The top three careers reported among millionaires were
Celebrities; developers; writers
Accountants; engineers; teachers
Pro athletes; bankers; CEOs
Lawyers; surgeons; accountants
24
If people saved the equivalent of a car payment each month for a year, they could have enough $$ to buy a car with cash.
False
True
25
Earned interest is interest you pay on a credit card.
True
False
26
The best way to build wealth is to start investing early. You should start investing money...
You're out of college, living debt-free, & have 3-6 months expenses saved
When the stock market is performing really well
Once you have a fully-funded emergency fund
As soon as you have extra cash
27
The only place you should keep your emergency fund money is...
A savings account or money market account
A Roth IRA
An envelope in a safe place
A safe in your bedroom
28
________________ is a millionaire's best friend.
Compound growth
Profit sharing
High returns
Accrued interest
29
Which principle says that a certain amount of money today is worth more than the same amount in the future?
Rate of Return
The time value of money
Inflation
Principal interest
30
You should budget in this order: giving, savings, spending.
True
False
31
The amount of interest charged on a debt but not yet collected is called...
Growth Rate
Interest Rate
Same-as-cash
Accrued Interest
