Personal Finance, Chapter 2, Section 2

A way to save for large purchases over time and pay with cash is to set money aside in a...

• Sink hole

• Kitchen sink

• Emergency fund

• Sinking fund

Using the sinking fund approach, how much do you need to save each month to buy a $4,800 car one year from now?

• $200

• $400

• $600

• $800

What is the key ingredient when it comes to wealth building?

• Income

• Emergency fund

• Investing

• Discipline

Which is not a reason your emergency fund should be kept in a separate savings account away from your spending money?

• So that your emergency fund savings can earn a lot of interest.

• So that it is clear what money is only for emergencies.

• So it is not too easy to access.

• So you don't get your spending and savings confused.

An account that generates interest income on the available balance in the account.

• An interst-ing account

• An awesome account

• An interest-bearing account

• A sinking account

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

• True

• False

For which of the following should you save (choose all correct answers)?

• Wealth building

• Lending to friends

• Emergencies

• Purchases

What is saving about?

• Making more money and discipline

• Contentment and investing

• Contentment and emotion

• Pride and greed

Why do people not save money?

• They lack focus.

• They lack discipline.

• They do not live on a budget.

• All of these.

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.

• True

• False