Foundations in Personal Finance Chapter 2 Part 3

When you're older and out of school, you'll need to grow your emergency fund into a full three to six months' worth of expenses.

• True

• False

You should keep your emergency fund in the same account as your spending money.

• True

• False

You should save money for three basic reasons: emergency fund, purchases and wealth building.

• True

• False

You should hold off on investing for retirement until you have college or other post-secondary education paid for.

• True

• False

Saving money over time for a large purchase

• Installment loan

• Sinking fund

Percentage paid to a lender for the use of borrowed money, or the percentage earned on invested principal

• Interest rate

• Savings rate

Save a $500 emergency fund

• Fifth Foundation

• First Foundation

The persistent rise in the cost of goods and services

• Inflation

• Deflation

Money set aside and left alone for a "rainy day."

• Emergency fund

• Savings account

When a person intentionally invests money in a place where it can earn more money

• Sinking fund

• Wealth building