Emergency Fund Flashcard

Front

What is the primary purpose of an emergency fund according to the text?

Back

To cover unforeseen circumstances

Front

How should an emergency fund be built, as suggested in the text?

Back

By consciously adding more money

Front

Which of the following is NOT mentioned as a potential use for an emergency fund? Car troubles, Losing a job, Rapid decline in the financial market

Back

Buying a new house

Front

What was the average loan rejection rate before the COVID-19 pandemic?

Back

14.2%.

Front

By October 2020, what did the loan rejection rate increase to during the pandemic?

Back

18%.

Front

What credit score was considered good but still denied credit during the pandemic? Options: 600, 650, 680, 700

Back

680

Front

What is the recommended duration for an emergency fund to cover basic living expenses?

Back

3-6 months

Front

According to experts, how many months' worth of salary should you save as an emergency fund?

Back

Three months

Front

What is one of the most common reasons to need an emergency fund?

Back

Unemployment

Front

What should be used as a baseline to calculate the amount needed for an emergency fund? Options: Annual income, Basic monthly living expenses, Total savings, Monthly entertainment budget

Back

Basic monthly living expenses