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WorksheetsSaving Chapter 2
Total questions: 31
Worksheet time: 16mins
Which of the following steps is the First Foundation?
Get out of Debt
Build wealth and give
Save a $500 emergency fund
Pay cash for your car
Instead of borrowing money for large purchases, you should set money aside in a ________________ over time and pay with cash.
emergency fund
sinking fund
credit card fund
mortgage fund
What does it mean to have a negative savings rate?
Saving for something that is a want instead of a need.
Having a fully funded emergency fund
having no savings at all
spending more money than you make and acquiring debt.
The saving habits of Ben and Arthur best illustrate which principle of saving?
The length of time money is invested matters.
The amount of the initial investment is the key.
Rate of return
Both A and C.
This principle suggests that a certain amount of money today has different buying power than the same amount of money at some time in the future. This is due to both the opportunity to earn interest on the money and because inflation will drive prices up, thereby changing the "value" of the money.
Opportunity Cost
Time Value of Money
Interest Rate
Inflation
For which of the following should you save?
Purchase
Wealth building
Emergency Fund
All of the above
Using the sinking fund approach, how much do you have to save each month to buy a $4800 care one year from now?
$400
$300
$275
$500
At your age, a fully funded emergency fund should be:
$500
$5,000
$100
$1,000
Which of these is NOT a key to saving money?
Focus
making saving a habit and a priority
your Income
Discipline
Which of the following is a reason that people don't save money?
They lack discipline
They do not live on a budget
They lack focus
All of the above
Which of the following is NOT one of the three basic reasons for saving money?
Emergency fund
Large purchases
have money available to lend to friends
build wealth
Which of the following is NOT a reason your emergency fund should be kept in a separate savings account away from your spending money?
So that you do not get your spending and saving money confused.
So that it is clear what money is only to be used for emergencies.
so that is is not too easy to access.
So that your emergency fund savings can earn a lot of interest.
Why is having a fully funded emergency fund so important when if comes to your financial well-being?
As long as you have a good-paying job, you really don't need an emergency fund.
The purpose of an emergency fund is to set money aside for unexpected financial emergencies and to provide a sense of financial security.
The purpose of an emergency fund is to have money set aside for large purchases, like vacations.
none of the above.
Saving is about:
Contentment and emotion
Contentment and earning more money
Making more money and discipline
Pride and greed
Why should interest earned not be a factor with your emergency fund?
Inflation can eat up the interest earned
Interest-bearing accounts at banks earn a high rate of interest, therefore, interest is not a concern.
The emergency fund is not intended to grow wealth.
none of the above.
The first thing you should save for is your retirement fund
True
False
Your income level greatly affects your saving habits.
True
False
You should save money for three basic reasons: Emergency fund, purchases and wealth building.
True
False
When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done.
True
False
When you're older and out of school, you'll need to grow your emergency fund into a full three to six months' worth of expenses.
True
False
You should keep your emergency fund in the same account as your spending money.
True
False
An interest-bearing account is an account that generates interest income on the available balance in the account.
true
false
When you're in high school, you won't have the same emergency expenses as your parents.
True
False
You should hold off on investing for retirement until you have college or pother post-secondary education paid for.
True
False
Americans typically maintain a very high savings rate.
True
False
money set aside and left alone for a "rainy day".
emergency fund
savings account
retirement fund
storm fund
Percentage paid to a lender for the use of borrowed money, or the percentage earned on invested principal.
tax rate
savings rate
prime rate
interest rate
Interest paid on interest previously earned.
interest
compound interest
sinking fund
interest-bearing account
The five steps to financial success are:
Five Saving Tips
Five money myths
The Five Foundations
Keys to success
Save a $500 emergency fund is the ________ step.
First Foundation
Fourth Foundation
Second Foundation
Fifth Foundation
When a person intentionally invests money in a place where it can earn more money.
wealth building
sinking fund
non-interest bearing account
interest bearing account
