Chapter 2

An account that generates interest income on the available balance in the account.

• Interest Rate

• Sinking Fund

• Compound Interest

• Inflation

• Interest-Bearing Account

The five steps to financial success

• Sinking Fund

• The Five Foundations

• Emergency Fund

• Inflation

• Compound Interest

A savings account that is set aside to be used only for emergency expenses.

• Interest-Bearing Account

• Sinking Fund

• The Five Foundations

• Emergency Fund

• Compound Interest

Interest paid on interest previously earned.

• Interest Rate

• Compound Interest

• Interest-Bearing Account

• Sinking Fund

• Inflation

Saving money over time for a large purchase.

• Inflation

• Emergency Fund

• Interest-Bearing Account

• The Five Foundations

• Sinking Fund

The persistent increase in the cost of goods and services or the persistent decline in the purchasing power of money.

• Interest Rate

• Sinking Fund

• Inflation

• Interest-Bearing Account

• Emergency Fund

A rate which is either charged (on debt) or paid (on an investment) for the use of money.

• Inflation

• Interest Rate

• Emergency Fund

• Interest-Bearing Account

• The Five Foundations

When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done.

• True

• False

Your income level greatly affects your saving habits.

• True

• False

At your age, a fully funded emergency fund should be:

• $1000

• $500

• $100

• $500