Chapter 3 Assessment

45% of Americans have less than $______ saved for an emergency

• 1000

• 500

• 100

• 10,000

Paying for things in your past means you’ll have less ________ with your money

• incentives

• freedom

• debt

• credit

The first step you should take when you want to make a large purchase is . . .

• Ask your parents to loan you the money with low interest

• Decide how much you'll need to save and the time frame you want to save it in

• Sell something and use the proceeds

• Get a new credit card

You should never touch your $______ emergency fund?

• 1,000

• 500

• 250

• 5,000

A savings account is the best place for your __________________

• Emergency Fund

• Retirement $

• Fun Money

• New car fund

The bank pays you for using your money. What is this payment called?

• Deposits

• Inflation

• Principal

• Interest

It is cheaper to finance a car than to buy a car with cash?

• True

• False

Which two habits are the most important for building wealth and becoming a millionaire?

• Working a high-paying job and relying on a trust fund

• Always paying off your credit card on time and putting extra money into a retirement account

• Consistently investing money and patience to give it time to grow

• Watching the market for "hot stocks" to buy and then quickly sell for a high profit.

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 purpose of an emergency fund is to ...

• Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.

• Teach you how to invest in growth stock mutual funds.