Chapter 3 Assessment

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

• Emergency

• Car

You'll have less freedom with your money if you ..

• Invest in a mutual fund

• Are paying for things in your past

Once you have a $500 emergency fund, you should ...

• Start putting it toward debt

• Invest it in the stock market to grow your money

• Retirement fund

• New smartphone

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

It's not IF an emergency will happen, but

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

Why do some accounts, like savings accounts at your local bank, earn interest?

• Because you deposit money, adding to your principal each month

• Because the bank pays you to use your money

• Because those accounts always have great interest rates

• Because of inflation

If you really want to save money, you've got to...

• Fly economy class

• Live on less than you make

The only place you should keep your emergency fund money is...

• A savings account or money market account.

• A safe in your bedroom

If people saved the equivalent of a car payment each month for a year or two (instead of spending it on payments and interest), they could have enough money to buy a car with cash for much cheaper!