Personal Finance

What is a budget?

• A type of savings account

• A way to invest for retirement

• A fund for emergencies

• A financial plan that defines expenses for a period of time.

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.

Emergency funds are calculated based on:

• Monthly Expenses

• Monthly Income

• Retirement Planning

• Investing for College

How many months of expenses should be set aside for an emergency fund?

• 3-6 months

• 6-12 months

• 12-18 months

• 1-3 months

Which of the following are characteristics of money used as savings, including emergency funds?

• Safe

• Accessible

• Liquid (in the form of money)

• Invested in risky business ventures

What is required for money to be SAFE? (select all that apply)

• Only the owner should be able to get it

• It can't go greatly down in value.

• It can grow in value over time

• Anyone can steal it easily

What is meant by money being ACCESSIBLE? (select all that apply)

• Anyone can get it easily

• The owner can get it quickly

• It takes a long time to get the money

• The owner can get it easily

What is meant by money being LIQUID? (select all that apply)

• It's stored in the form of physical money

• It's stored in the form of electronic money

• It's invested in something that must be sold to obtain money

• It's invested in something that's valuable, but not money

Why should we INVEST instead of SAVE for retirement?

• Investing money can make it grow in the long term.

• Investing is safer than saving.

• Saving is too risky for retirement.

• Investing is more fun than saving.

Why shouldn't we invest our emergency fund or other short-term savings?

• Investments are risky and can drop in value, especially in the short term.

• Investments are safe and can grow in value, especially over the long term.

• We should invest all of our money so it can grow quickly and we can become rich.

• We should never invest any money because we could lose it all.