Chapter 3 Savings

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

• New smartphone

• Emergency

• Car

• Retirement fund

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

• Put money in a bank account

• Make less than $35,000

• Are paying for things in your past

• Invest in the stock market

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

• New smartphone

• Retirement fund

• Start putting more money toward debt

• Invest it in the stock market to grow your money

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

• Get a new credit card

• Use the money to pay for health insurance

• Save it until you have an emergency

It's not IF an emergency will happen, but

• When

• Where

• Save it until you have an emergency

• Use the money to pay for health insurance

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

• Once you have a fully funded emergency fund

• When the stock market is performing really well

• As soon as you have extra cash

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

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...

• Invest in a Roth IRA

• Fly economy class

• Live on less than you make

• Have a financial advisor

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

• A Roth IRA

• A savings account or money market account.

• An envelope in a safe place

• 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!

• Profit sharing

• True

• High returns

• False