SAVINGS

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

• Aunt Tina gets a paycheck one month, and her husband gets a paycheck the next month; they alternate pay periods

• Aunt Tina and her family don't have any money saved, and their paychecks are just barely covering monthly expenses, so they use every dollar every month

• Aunt Tina and her family have high paying jobs and don’t worry much about money

• Aunt Tina uses her paychecks as income to deposit into her checking and savings accounts

How is an online savings account different from a traditional savings account?

• An online savings account includes a mobile app, while a traditional savings account does not

• An online savings account is offered by a bank that customers can only access online rather than at a physical bank branch

• Online savings accounts will only offer electronic statements rather than paper copies

• Online savings accounts cannot be FDIC insured, whereas traditional savings accounts can

In current markets, which of these represents a competitive but realistic interest rate on a savings account?

• 2%

• 3%

• 7%

• 17.99%

Which of these is an example of "FOMO?"

• Buying new sneakers the day they come out, because you know others in your class will have them, too

• Applying to the top colleges, to see if you'll get accepted & what financial aid packages they'll offer

• Saving for retirement as soon as you graduate college, to take advantage of compounding interest

• Buying plane tickets for vacation well in advance so that you'll benefit from cheaper prices

Experts recommend that you accumulate enough to cover 3 to 6 __________________ of expenses in your emergency fund.

• Days

• Weeks

• Months

• Years

Which of the following statements is TRUE?

• The majority of Americans have an adequate emergency fund.

• The majority of Americans have sufficient amounts of money saved for retirement.

• The majority of Americans have an adequate emergency fund, but do NOT have 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.

Which statement best describes the difference between saving and investing?

• Saving is done with small amounts of money, and investing is done with large amounts of money

• Saving protects your money from inflation while investing does not protect your money from inflation

• Saving is for low-income people, while investing is for rich people

• Saving goes into an FDIC insured bank while investing typically goes into stock or bond markets

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

• Retirement, a house down payment, college tuition

• A new cell phone, college tuition, a house down payment

• A new cell phone, dinner with friends this weekend, a new bike

• Retirement, college tuition, a vacation

You want to take earnings from your part-time job to pay for a new laptop. Your monthly take-home pay is $500 and the laptop costs $1,200. What percentage of your pay do you need to save in order to buy the laptop in 12 months?

• 5%

• 10%

• 15%

• 20%

Joelle wants to have an emergency fund to cover 6 months of her expenses. Her monthly gross pay is $4,000 and her monthly expenses are $2,000. If she plans to save 10% of her gross pay each month,

• 3 months

• 9 months

• 24 months

• 30 months