Savings Quiz Review

Which of these statements about saving is INCORRECT?

• It is extremely difficult to open a savings account, as you typically need at least $10,000 for your initial deposit

• Savings accounts aren't necessary if you invest

• Savings accounts aren't necessary if you have a checking account

• Savings accounts help you "pay yourself first"

Which of the following is an effective strategy for personal saving?

• Put whatever you have leftover from paying bills in a piggy bank

• Save a certain percentage of your pay each month

• Save $5 a month, no matter what

• Hide some cash under your mattress

Which of the following statements about banks is FALSE?

• If it is FDIC-insured, your money is safe even if the bank fails

• Money in a bank is usually easy to access via ATM, debit card or check

• Many banks pay interest on the money you deposit with them

• Historically, savings accounts earn higher returns than investments in the stock market

You should put 20% of your take home pay into savings

• True

• False

You write checks from your savings account.

• True

• False

A short term financial goal would be to earn enough money this weekend to buy your friend a birthday present next week.

• True

• False

A medium term financial goal would be to save up enough money to buy a ticket to a music festival next summer.

• True

• False

A long term financial goal would be to save up enough money to put a deposit down on your first apartment.

• True

• False

Fill in the blanks with the correct responses. If you follow the 50-20-30 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 20% of your monthly income toward _____________, and 30% of your monthly income toward ______________.

• Needs, wants, savings

• Savings, needs, wants

• Needs, savings, wants

• Wants, needs, savings

An example of saving is putting funds in a savings account each month while an example of investing would be buying stock in Amazon.

• True

• False