Chapter 3 Lesson 4 Saving for Large Purchases

How can you effectively create a savings plan for a new car?

• Save a random amount each month.
• Decide how much you need and divide it by the months you have to save.
• Only save when you have extra money.
• Borrow money from friends to pay for the car.

What strategy can help you avoid debt when making large purchases?

• Only shopping during sales.
• Buying items on impulse.
• Planning ahead and saving over time.
• Using credit cards for all purchases.

How can saving money for a purchase be more beneficial than using credit?

• You will always have enough money.
• You can get cash back rewards.
• You can buy more items at once.
• You avoid interest payments.

What is one advantage of saving money for large purchases?

• You can always pay less than the total cost.
• You can get cash back on every purchase.
• You can buy items on impulse.
• You can avoid going into debt.

What does paying cash for a purchase help you avoid?

• The need to save money.
• The ability to buy items on credit.
• Paying more than the item's value.
• The risk of accumulating debt.

If you want to buy a used car costing $5,540 in 10 months, how much should you save each month?

• $600
• $700
• $500
• $554

Why is it important to know the total cost of an item before buying?

• To compare prices with other stores.
• To ensure you can pay in cash.
• To understand the monthly payment options.
• To avoid buyer's remorse.

What is a potential consequence of impulsive buying decisions?

• You could end up with buyer's remorse.
• You will always find the best deals.
• You might save more money.
• You will never regret your purchases.

How do interest rates affect the total cost of loans?

• Higher interest rates decrease the total cost.
• Interest rates have no effect on loans.
• Lower interest rates increase the total cost.
• Higher interest rates increase the total cost of loans.

What is a common misconception about paying for items with monthly payments?

• You can avoid paying interest by making monthly payments.
• The total cost is often higher than the advertised price.
• Monthly payments are always cheaper than paying cash.
• Monthly payments help you save money.