Saving Money

What happens to the money that you deposit in a savings account at a bank?

• The bank lends out the money at a higher interest rate than what they are paying you

• The bank lends out the money at a lower interest rate than what they are paying you

• The money sits at the bank until you are ready to withdraw or use it

• The money is sent to the Federal Reserve, where it sits until you’re ready to withdraw or use it

What does it mean if a person lives paycheck-to-paycheck?

• They use their entire paycheck to cover monthly expenses and have very little money saved

• Their income varies month-to-month and they save a large portion of their biggest paychecks

• They use direct deposit, so their paycheck is automatically split between their checking and savings accounts

• They have high-paying jobs, so don’t have to worry about how much is in each paycheck

Using the 50/30/20 budgeting plan can help you save money because…

• It limits your spending to $50 per month

• It recommends that 20% of your budget goes to debt repayment or savings

• It recommends that 50% of your budget goes to debt repayment or savings

• For every $50 you save, a bank will give you $30 or a credit union will give you $20

Tre just got a part-time job, and his sister recommends he “pay himself first.” What is she talking about? 

• Tre should deposit his check as quickly as possible before taxes can be taken out

• Tre should set aside part of every paycheck for savings before he does any spending

• Tre should spend the money he needs before he lends any to friends or gives to charity

• Tre should start his own business rather than being someone else’s employee

Misty is going to use the 50/30/20 rule in order to save $3000 for her family’s next big vacation. Her monthly income is $2500. How many months will it take her to reach her savings goal? 

• 2.4 months

• 4 months

• 5 months 

• 6 months

How much do personal finance experts recommend having saved in an emergency fund?

• 1-3 month of expenses

• 4-6 months of expenses

• 7-9 months of your salary

• 1-2 years of expenses

The majority of Americans...

• Have an adequate emergency fund and have enough saved for retirement

• Have an adequate emergency fund but do NOT have enough saved for retirement

• Do NOT have an adequate emergency fund but have enough saved for retirement

• Do NOT have an adequate emergency fund and do NOT have enough saved for retirement

Over the last twenty years, how have wages changed compared to the costs of housing, healthcare, and education?

• Wages have increased at a slower rate than those costs

• Wages have increased at the same rate as those costs

• Wages have increased at a faster rate than those costs

• Wages have decreased as those costs have increased

Which pair of savings strategies will likely work best if your goal is saving $5000 in the next 3 years?

• Get a couple of part time jobs to increase income and then also increase your spending

• Pay all of your bills in cash and then save all your pocket change

• Control impulse spending and break your goal into smaller time frames

• Keep your money in a checking account and only spend using your debit card