Saving and Investing 2

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 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

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 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 inflation impact the money in your savings account?

• Inflation decreases only the $ you earn in interest
• Inflation increases the value of the money in your account
• Inflation has no impact on $ in your savings account.
• The purchasing power of your money decreases over time

Putting money aside for a trip/vacation this summer

• Saving

• Investing

Putting Money aside for a car...

• Saving

• Investing

Saving money now can help you with which of the following?

• Prepare for unexpected emergencies

• Prepare for retirement

• Reach financial security

• All of these answers are correct.

Contributing 4% of your paycheck to a 401(k) plan offered through your job

• Saving

• Investing

Buying shares of stock in your favorite shoe company

• Saving

• Investing