Savings: Emergency Funds.

Lesson Objective(s)

​Students will be able to

Understand and explain the importance of savings for an emergency expense.

​Let's review some concepts from prior lessons on Banking and Savings Options.

Multiple Choice

The FDIC insures accounts up to...

• $250

• $2,500

• $25,000

• $250,000

Multiple Choice

A certificate of deposit...

• Is a certificate that verifies your deposit

• Is a certificate that verifies your bank information

• Is a deposit that does not earn interest over a term

• Is a deposit that earns interest over a term

Multiple Select

Select all of the services most commonly provided by banks.

• Borrowing Services

• Savings Accounts

• Payment Services

• Brokerage Accounts

Multiple Choice

A type of bank account where the bank invests the money in government and corporate securities in order to pay a higher interest rate than a regular savings account. You typically have to have a large minimum balance in order to have such an account.

• Savings Account

• Money market account

• Checking Account

• CD

Multiple Choice

Savings accounts have _______  interest rates.

• Low

• High

DATA ANALYSIS

In 2021, 68% of respondents would cover a $400 emergency expense using cash or its equivalent (Federal Reserve Bank). The graph that follows shows the other ways respondents would cover the expense. 

Analyze the data on the next slide and answer the questions that follow. 

Multiple Choice

What percent of respondents say they would have NO way to cover a $400 expense?

• 14%

• 8%

• 11%

• 6%

Multiple Choice

What percent of respondents say they would borrow money from a friend to cover a $400 expense?

• 14%

• 8%

• 11%

• 6%

CLASS DISCUSSION

Based on the data from the graph, which type of credit MORE Americans have access to?

DISCUSS WITH A PARTNER(S)

• Think of a least three reasons why some Americans don't have $400 to cover an emergency expense.

• Share and compare your answer with the person next to you.

• Be prepared to be called to share your response with the class.

​Read the article on the next slide up to the section titled: "How much should I save?", and then answer the questions.

READING ACTIVITY

Reading Options:

(1) Online Article.

(2) PDF without images in google classroom

(3) Physical print

Emergency Fund: What it Is and Why it Matters - NerdWalletNerdWallet Home PageNerdWallet Home Page

You can open this webpage in a new tab.

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Multiple Choice

What is an emergency fund?

• A savings account set aside for unexpected situations.

• A way to invest for retirement.

• Something most people don't need, because emergencies are rare.

• An investment account that can grow over time.

Open Ended

List three unexpected expenses for which a person would need an emergency fund.

Multiple Choice

An adult should have at least ____________ in an emergency fund.

• 6 months of income

• $500

• 6 months of expenses

• $12,000

​DO YOU HAVE ANY QUESTIONS?

About any of the topics covered in this presentation:

• People's ability to cover an emergency expense

• Reason for an emergency fund

• How much to save for an emergency fund

Go back to the article on the next slide and read the section titled: "How do I build an emergency fund?"

READING ACTIVITY

Reading Options:

(1) Online Article.

(2) PDF wihout images in google classroom

(3) Physical print

Emergency Fund: What it Is and Why it Matters - NerdWalletNerdWallet Home PageNerdWallet Home Page

You can open this webpage in a new tab.

Copy link

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Reorder

Reorder the steps for how to build an emergency fund.

• Calculate the total that you want to save.

• Set a monthly savings goal.

• Move money into your savings account automatically.

• Keep the change.

1

2

3

4

• 1
• 2
• 3
• 4

Open Ended

EXIT TICKET: List at least three things you learned from this lesson.