Unit 1 Review (Savings)

Wealth is calculated by...

• adding up all your money
• adding up your assets and your debt
• subtracting your total debt from your total assets
• subtracting your money from your savings

How much of your paycheck should you save according to experts?

• 5%
• 20%
• 45%
• 80%

Which of the following statements is TRUE

• The majority of Americans have an adequate emergency fund and sufficient amounts of money saved for retirement.
• The majority of Americans do not have an adequate emergency fund or sufficient amounts of money saved for retirement.
• The majority of Americans have an adequate emergency fund but not sufficient amounts of money saved for retirement.
• The majority of Americans do not have an adequate emergency fund but do have sufficient amounts of money saved for retirement.

Experts recommend you save money in an "emergency fund." Which of these represents an expense where the emergency fund would be particularly useful?

• Monthly rent
• $150 Speeding Ticket
• Occasional fancy dinner or vacations
• Car insurance

What three words can be an effective to encourage personal savings?

• Pay expenses first
• Save later on
• Just spend it
• Pay yourself first

Which of the following is an investment?

• Money deposited into a savings or checking account
• Money deposited into a 401(k) account
• Money you are planning to spend on a new car
• Money you are planning to spend on a trip

What is one good strategy for saving money?

• Save as much as possible, even if it means you can’t afford to pay your bills
• Set aside part of each paycheck to save first, and then build your budget around that
• Focus on buying your dream home
• Put as much money into your 410(k) as possible

Which of these is an example of "delayed gratification" when it comes to spending or saving money?

• Do your online shopping later in the day, once you've had time to really think it through
• Pack your lunch instead of dining out each day, and save all that money for a vacation
• Live life to your fullest while you're in your teens and 20s, then begin saving for retirement once you turn 30
• Whenever possible, pay with credit card so you don't have to actually make a payment until your bill is due

You are planning to open an online savings account to hold $10,000 in an emergency fund. The online account pays 1.25% compounded quarterly. If you do not deposit or withdraw any money from the account, how much will be in that account in 15 years?

• $10,304.47
• $10,610.75
• $12,058.78
• $63363.29

You are opening a savings account to hold your emergency fund of $45,000. The account pays 1.75% compounded monthly. If you do not deposit or withdraw any money from the account, how much interest will you have earned in 20 years?

• $18,841.76
• $17,238.99
• $46,602.77
• $63,841.76