Final Review Day 2

45% of Americans have less than $1,000 saved for a(n) ______.

• Emergency

• Car

• Retirement Fund

• New Smartphone

The best way to build wealth is to start investing early. You should start investing money...

• Once you have a fully funded emergency fund

• Once you're out of college, living debt-free, and have 3-6 months of living expenses saved

• When the stock market is performing really well

• As soon as you have extra cash

The interest rate on a savings account determines...

• How much money you need to have to open the account

• How much you will pay the bank to manage the account

• The amount of time your money will be in the account

• How quickly your money will grow over time

The main reasons for saving your hard-earned money are...

• Emergencies, large purchases, and wealth building

• Paying for your dream home, buying your dream car, and going on your dream vacation

• Buying gifts, donating to charities, and building up a college fund for your kids

• Investing, indulging, and influencing

Once you're out of school, have started your career, and have zero debt, your emergency fund should have ______.

• 3-6 months of income

• 3-6 months of living expenses

• $3,000

• $5,000

Banks and lenders use credit scores to determine...

• The likelihood that someone is able to repay debt

• A person's financial responsibility

• How much collateral someone has available to put up for a loan

• How successful someone is

Your greatest tool to building wealth is ________.

• Tax cuts

• Single stocks

• Your income

• Your credit score

Credit card companies make the most profit from _______.

• Incentive programs with banks

• Partnering with companies to offer rewards to customers

• Government tax breaks

• Charging interest to customers who only pay part of their monthly debt

Which is an example of an appreciating asset?

• A computer used for business purposes

• A new car purchased within the past 6 months

• A piece of farming equipment

• A home

The debt snowball method involves...

• Waiting until the winter months to begin paying off debt

• Paying off debts from largest to smallest

• Pooling together money from other people to pay off your debt

• Paying off debts from smallest to largest