Ch 1 Money in Review

Match the terminology

• interest paid on interest previously earned

• money market mutual fund

• percentage paid to a lender for the use of borrowed money

• interest rate

• 3-6 months of expenses in readily available cash to be used in an emergency

• sinking fund

• seeks to maintain a stable share price & to earn income by investing in orgs w short term maturities

• compound interest

• saving money for a specific purpose to allow interest to work for you rather than against you

• emergency fund

What is baby step number one

• save $1000 cash as a starter emergency fund

• pay off all debt except the house utilizing the debt snowball

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number two

• save $1000 cash as a starter emergency fund

• pay off all debt except the house utilizing the debt snowball

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number three

• save $1000 cash as a starter emergency fund

• pay off all debt except the house utilizing the debt snowball

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number four

• save $1000 cash as a starter emergency fund

• pay off all debt except the house utilizing the debt snowball

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number five

• pay off your home early

• build wealth and give

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number six

• pay off your home early

• build wealth and give

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

What is baby step number seven

• pay off your home early

• build wealth and give

• 3-6 months of expenses in savings

• invest 15% of your household income into Roth IRAs and pre-tax retirement plans

• College funding for your kids

Baby step 1 is ​ (a)   in an emergency fund (if you make less than $20,000 per year in your household, put ​ (b)   in an emergency fund). ​ (c)   must become a priority. Decide to pay ​ (d)   first. Money is ​ (e)  

• $1000
• $500
• Saving
• yourself
• amoral
• Planning
• the smallest debt
• principled
• $200
• $1500

Many Americans have a ___ savings rate

• negative

• positive

• steady