3.1-3.3 Savings Review

How much is recommended to save per month?

• 20% of income

• 30% of income

• 50% of income

• As much as possible

Why does it make sense to start saving or investing right now? (Choose 2)

• Longer time your money has to grow

• You have more money available now

• Compound Interest

• You make better decisions when you are younger

Determine whether the action is an example of saving or investing:

Putting $20 per paycheck into an account to help pay for books during college

• Saving

• Investing

Determine whether the action is an example of saving or investing:

Contributing 3% of your paycheck to a 401(k) plan offered through your job

• Saving

• Investing

Determine whether the action is an example of saving or investing:

Buying shares of stock in your favorite clothing company

• Saving

• Investing

Determine whether the action is an example of saving or investing:

Giving your cousin $5000 to help start his business, in exchange for 5% of his monthly profits

• Saving

• Investing

Determine whether the action is an example of saving or investing:

Depositing your annual income tax return into an account until you have enough to buy a car

• Saving

• Investing

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 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