Personal Finance, Chapter 2, Section 1

For a teenager your age, a fully funded emergency fund should be:

• $500

• $1000

• $100

• $5000

The three basic reasons for saving money:

• Vacation, lending to friends, eating out

• Eating out, buying a fancy car, buying a dog

• Emergency fund, large purchases, build wealth

• Going to Disney, dates, vacation

What is the First Foundation?

• Get out of debt

• Pay cash for your car

• Save a $500 emergency fund

• Build wealth and give

Why is having a fully funded emergency fund so important?

• To set money aside for unexpected financial emergencies and to provide a sense of financial security.

• To have money set aside for large purchases, live vacations.

• Who needs an emergency fund when you have a good-paying job?

Having a negative savings rate means:

• Having a fully funded emergency fund.

• Spending more money than you make and acquiring debt.

• Saving for something your really want.

• Having no savings.

The first thing you should save for is retirement.

• True

• False

Americans usually have a very high savings rate.

• True

• False

When you are older, you will need to grow your emergency fund into a full 3 to 6 months' worth of expenses.

• True

• False

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

• True

• False

The five steps to financial success are called the:

• Five money myths

• Five Alive

• High Five

• Five Foundations