Taxes, Savings, Budgeting, Credit, Debt, Scams

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

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

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

How does the 50-20-30 rule distribute your income?

• 50% expenses, 20% flexible spending, 30% saving
• 50% expenses, 20% saving, 30% flexible spending
• 50% flexible spending, 20% saving, 30% expenses
• 50% saving, 20% flexible spending, 30% expenses

How is compound interest different than simple interest?

• It is simple interest - interest earned on that interest
• It is double the simple interest earned on an investment
• It is simple interest + interest earned on that interest
• It's not different; they are one and the same

Saving accounts differ from checking accounts in that...

• Money in a saving account can be used to fund a bank's loans
• Saving accounts let you withdraw $ an unlimited # of times
• Saving accounts come with more fees than checking accounts
• Checking accounts offer higher interest rates