Saving for the Future

Aria is trying to build up her savings. Which are the three most helpful questions she should ask herself before making a purchase?

• Is the product available at a different retailer?

• Can I buy a cheaper, generic product that serves my purpose just as well as this name-brand product?

• Am I making an impulse purchase?

• Can I make this purchase using credit?

• Is this a discretionary expense that I can avoid?

Tags

CCSS.RI.1.4

CCSS.RI.2.1

CCSS.RI.3.1

CCSS.RL.2.1

CCSS.RL.3.1

Which behavior can help increase savings?

• shopping for items at convenience stores

• making purchases using credit

• identifying and removing discretionary expenses from a financial budget

• taking out a loan to make a down payment for a purchase

Why is it important for a rainy-day fund to be highly liquid?

• Funds need to earn a high rate of return.

• Funds need to be easily accessible.

• Funds need to be stored in a safe place.

• Funds need to be invested to achieve long-term savings goals.

Which statement correctly identifies a difference between an emergency fund and a rainy-day fund?

• An emergency fund is larger and should have a balance equal to three to six months of income.

• A rainy-day fund is larger and should have a balance equal to three to six months of income.

• An emergency fund is smaller and used for minor unexpected expenses, such as replacing an appliance.

• A rainy-day fund is smaller and used for expenses that are planned.

What is an important requirement for an emergency fund?

• liquidity

• keeping it in a locked safe

• investing it in retirement account

• a high interest rate

Which situation is best met through long-term saving?

• a broken refrigerator

• retirement

• an unexpected car repair

• an unexpected medical bill

Tags

CCSS.7.RP.A.2C

Discretionary expenses are _______ and can be reduced to help save money . For example, a _______ is a discretionary expense.

• necessary

• optional

• car payment

• rent payment

• magazine subscription

Tags

CCSS.RI.8.2

CCSS.RL.11-12.2

CCSS.RL.7.1

CCSS.RL.8.1

CCSS.RL.9-10.2

Jenna has completed one year at her first job and wants to start saving for her future. Jenna could use _________ to save for retirement and _________to save for her child's education.

• a 529 plan
• an IRA

• a rainy-day fund

Which type of savings fund is best suited for a down payment for home purchase?

• sinking fund

• rainy-day fund

• • emergency fund

  
  

Which type of savings fund is best suited for minor home repairs?

• sinking fund

• rainy-day fund

• • emergency fund