Budgeting: Setting Savings Goals & Creating a Savings Plan

Savings goals only take future plans into consideration.

• True

• False

Your emergency fund should equal at least ____ months of your living expenses.

• 2

• 4

• 6

• 8

Taking market and industry trends into consideration can help you determine how much to put aside in your emergency fund.

• True

• False

Your long-term savings contribution goal should be at least ____ of your total monthly takehome pay.

• 5%

• 10%

• 25%

• 50%

Which of the following is an example of a liquid asset? More than one answer may be correct.

• a) The desktop computer you no longer use.

• b) The $500 in your checking account.

• c) The certificate of title for your car.

• d) The extra $25 you made in cash tips

It’s important to have an emergency fund for which of the following reasons? More than one answer may be correct

• a) You may experience a period of unexpected unemployment with no income.

• b) Unexpected emergencies that require a substantial amount of money – for example, major car repairs or medical expenses.

• c) You might be invited by a friend to take an expensive vacation on the spur of the moment.

• d) All of the above

Rachael lost her job in June this year. Statistically speaking, approximately when can one expect her to secure a new job in her own field of expertise, with a pay structure that suits her?

• a) Within 1 week

• b) Within 2 weeks

• c) Within 4 weeks

• d) Depends on employment market condition

In each of the following situations, an individual would need to rely on their savings to meet the needs. Choose which type of savings should be used in each case.

Bob and his wife have recently retired and are looking to purchase a vacation home in Puerto Rico 2 years from now.

• a) Emergency Fund

• b) Short-term Savings

• c) Long-term Savings

In each of the following situations, an individual would need to rely on their savings to meet the needs. Choose which type of savings should be used in each case.

Nedra works as a freelance software developer. Her computer’s hard drive has crashed, and a major project is due in three days.

• a) Emergency Fund

• b) Short-term Savings

• c) Long-term Savings

In each of the following situations, an individual would need to rely on their savings to meet the needs. Choose which type of savings should be used in each case.

Paul has been asked to be the best man in his cousin’s wedding in 6 months. He will have to rent a tuxedo, purchase a plane ticket to Chicago, and get a hotel room.

• a) Emergency Fund

• b) Short-term Savings

• c) Long-term Savings