Saving

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 FALSE about saving and investing? (hint: choose 2 correct answers)

• Saving doesn't outpace inflation; investing usually does

• Both saving and investing generally have low returns

• Saving is for short-term; investing is for the long-term

• Saving has more risk; investing has less risk

Which is NOT a typical goal for a savings account?

• To create an emergency fund
• To pay for higher education
• To save for a new car
• To buy groceries for this week

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 for college students only

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

What is a good strategy to help you save?

• 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
• Pay yourself first - set aside money for savings each month
• Keep your spending and saving money together in 1 account

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

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

• It can help teens start saving for retirement early

• Compounding occurs at a slower rate in a Roth IRA

• 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

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