Check-In #6 - Saving Basics

Experts recommend you save money in an "emergency fund." Which of these represents an expense where the emergency fund would be particularly useful?

• Monthly rent

• $150 Speeding Ticket

• Occasional fancy dinner or vacations

• Car insurance

What three words can be an effective mantra to encourage personal savings?

• Pay expenses first

• Save later on

• Just spend it

• Pay yourself first

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Wealth is calculated by...

• adding up all your money

• adding up your assets and your debt

• subtracting your total debt from your total assets

• subtracting your money from your savings

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Which of the following is an investment?

• Money deposited into a savings or checking account

• Money deposited into a 401(k) account

• Money you are planning to spend on a new car

• Money you are planning to spend on a trip

Each of the following is a good reason you should contribute regularly to a savings account EXCEPT:

• Ensure you have enough rent money for next month

• Work toward saving enough for a car or home down payment

• Avoid borrowing money or paying credit card interest by having enough savings to pay cash for new smartphone

• Reduce amount of student loans needed by saving in advance for college

How much of your paycheck should you save according to experts?

• 5%

• 20%

• 45%

• 80%

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Which of the following statements is TRUE?

• The majority of Americans have an adequate emergency fund and sufficient amounts of money saved for retirement.

• The majority of Americans do not have an adequate emergency fund or sufficient amounts of money saved for retirement.

• The majority of Americans have an adequate emergency fund but not sufficient amounts of money saved for retirement.

• The majority of Americans do not have an adequate emergency fund but do have sufficient amounts of money saved for retirement.

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What is one good strategy for saving money?

• Save as much as possible, even if it means you can’t afford to pay your bills

• Set aside part of each paycheck to save first, and then build your budget around that

• Focus on buying your dream home

• Put as much money into your 410(k) as possible

Which of these is an example of "delayed gratification" when it comes to spending or saving money?

• Do your online shopping later in the day, once you've had time to really think it through

• Pack your lunch instead of dining out each day, and save all that money for a vacation

• Live life to your fullest while you're in your teens and 20s, then begin saving for retirement once you turn 30

• Whenever possible, pay with credit card so you don't have to actually make a payment until your bill is due

Why is investing a better option than saving when it comes to planning for retirement?

• Investing usually has lower interest rates, so it offers a better deal

• Investing is guaranteed to produce the large sum of money needed for a happy retirement

• Investing begins as soon as you open a bank account, so you can start early in life

• The stock market historically has returns higher than the rate of inflation, so your money can actually grow