Foundations of Personal Finance-Module 2-Part 1

When you're in high school, you won't have the same emergency expenses as your parents.

• True

• False

The saving habits of Ben and Arthur best illustrate which principle of saving?

• The length of time money is invested matters.

• The amount of the initial investment is the key.

• Rate of return doesn't matter.

• None of these

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

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

• Sinking Fund

• Wealth Building

• Investing

• Emergency Fund

An interest-bearing account is an account that generates interest income on the available balance in the account.

• True

• False

Why is having a fully funded emergency fund so important when it comes to your financial well-being?

• As long as you have a good-paying job, you really don't need an emergency fund.

• The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security.

• The purpose of an emergency fund is to have money set aside for large purchases, like vacations.

• None of these

Saving is about:

• Contentment and emotion

• Contentment and earning more money

• Making more money and discipline

• Pride and greed

For which of the following should you save?

• Purchases

• Wealth building

• Emergency fund

• All of these

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

• $400

• $300

• $275

• $500

Which of the following is not one of the three basic reasons for saving money?

• Emergency fund

• Large purchases

• Have money available to lend to friends

• Build wealth