Personal Finance Chapter 3 Lesson 2

What is an emergency fund?

• Money saved for vacations

• Money saved for retirement

• Money saved to cover unexpected expenses

• Money saved for buying a car

Why is it important to have cash on hand for emergencies?

• To avoid using credit cards or getting loans

• To buy unnecessary items

• To invest in stocks and bonds

• To pay off existing debts

What is the key to building wealth?

• Instant gratification

• Patience and long-term financial goals

• Taking on debt

• Living paycheck to paycheck

What percentage of millionaires live on less than they make?

• 50%

• 75%

• 94%

• 100%

What is the benefit of saving money early?

• Being able to buy luxury items

• Being able to retire early

• Being able to live and give generously

• Being able to travel the world

What percentage of millionaires plan and save in advance for big expenses?

• 10%

• 33%

• 67%

• 95%

What is the first step to start saving money?

• Include saving in your budget

• Set a realistic savings goal

• Put spare change in a jar

• Set up an automatic transfer to savings account