Savings Final

How is wealth defined?

• How much money you have in your Checking and Saving accounts
• Debts - Assets
• All assets, including money in the bank + retirment
• Assets - Debts

Which of the following is TRUE about saving and investing? (hint: choose 2 correct answers)

• Saving doesn't outpace inflation; investing always does

• Both saving and investing generally have low returns

• Saving is usually for long-term; investing can be for short -term or long-term

• Saving has less risk; investing has more risk

Which of these are a typical goal for a savings account? (hint: pick 3 correct answers)

• To create an emergency fund

• To pay for higher education

• To save for a new car

• To buy groceries for this week

According to the 50-20-30 rule what is a general rule of thumb on how much you should save?

• 5% of your income

• 10% of your income

• 20% of your income

• 30% of your income

What is a 529 account?

• A type of retirement account for teens & younger adults

• A special type of saving account for minors

• A tax exempt fund that lets your savings grow for school

• A special type of saving account where your money almost doubles from $5 to $9 in a year

About how much should you save in an emergency fund?

• 1-3 months of living expenses
• 3-6 months of living expenses
• 6-9 months of living expenses
• 9-12 months of living expenses

Tags

CCSS.7.RP.A.3

The pay yourself first strategy is ...

• 1st, spend money on all expenses; put the rest into saving

• Tap into your savings on a regular basis to purchase small items, like snacks

• Set aside money for savings each month first, then pay your bills

• Keep your spending and saving money together in 1 account

Which of the following is TRUE about opening up a Roth IRA? (hint: choose 2 correct answers)

• A person of any age with earned income can open one

• The money taken out of a ROTH IRA is not taxed before it is invested in and is taxed after it is withdrawn.

• The money taken out of a ROTH IRA is taxed before it is invested and is not taxed after it is withdrawn.

• You need to put at least $1,000 in it every year

What is a reason for why so many Americans live paycheck-to-paycheck?

• Many people are paying themselves first and then spending

• Many people only buy what they NEED, not what they WANT

• Many people impulse shop

• Many people spend within their budget

Tags

CCSS.RI.11-12.4

CCSS.RI.7.4

CCSS.RI.8.4

CCSS.RI.9-10.4

CCSS.RI.9-10.4

What is a benefit of opening up a Health Savings Account (HSA)?

• The funds expire only every 5 years
• You earn interest, but it's taxed
• You can use the funds for retirement once you're 75
• You can use pre-tax $ to pay for out-of-pocket costs