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