Money
Where do you keep your emergency fund?
In a separate bank account
At your age, a fully funded emergency fund should be:
$500
Name the five foundations in order
1 Save a $500 emergency fund 2 Get out of debt (or stay out) 3 pay cash for your car 4 pay cash for college 5 Build wealth and give
What do you need to grow your emergency fund to when you get older?
A full three to six months worth of expenses
Interest Rate
A rate which is either charged (on debt) or paid (on investment accounts) for the use of money.
Emergency Fund
A savings account that is set aside to be used only for emergency expenses
Pay cash using what?
A sinking fund
Interest- Bearing Account
An account that generated interest income in the available balance in the account
What will start looking like an easy answer is you don't have money saved to pay for things?
Debt
When it comes to saving money the amount you save is determined by how much you have left at the end of the month once all of your spending is done
False
Which of the following is not one of the three basic reasons for saving money?
Have money available to lend to friends
Looking back at the "Ben and Arthur" story how did Ben come out ahead even though he invested less money than Arthur?
He started earlier so his money gained interest quicker
Compound Interest
Interest paid on interest previously earned
Economy
Money
What's the second thing you save money for?
Purchases
What is the First Foundation? Explain how and why the dollar amount will change as you get older.
Save a $500 emergency fund. The dollar amount will change because you have more responsibilities when you get older
Sinking fund
Saving money over time for a large purchase
Instead of borrowing money for large purchases you should set money aside in a _____ over time and pay with cash
Sinking fund
Why do you need an emergency fund at your age?
So that when things like a car repair come up, you aren't devastated financially
The five foundations
The five steps to financial success
What two things do you consider when evaluating the time value of money?
The inflation rate and the rate of interest
Inflation
The personal increase in the cost of goods and services or the persistent decline in the purchasing power of money.
Recession
The value of money goes down
Your income level greatly affects your saving habits
True
What's the third thing you save money for?
Wealth building