Personal Finance 2015 Chapter 2

You should hold off on investing for retirement until you have college or other post-secondary education paid for.

Saving money over time for a large purchase.

What does it mean to have a negative savings rate?

Your income level greatly affects your saving habits.

Compares after-tax income to the money people spend on a variety of items

The five steps to financial success

The first thing you should save for is your retirement fund.

13) Why is having a fully funded emergency fund so important when it comes to your financial well-being?

Money set aside and left alone for a ʺrainy day.ʺ

Which of the following is a reason that people donʹt save money?

Money today has different buying power than the same amount of money in the future

Which of the following is not a reason your emergency fund should be kept in a separate savings account away from your spending money?

You should save money for three basic reasons: emergency fund, purchases and wealth building.

Using the sinking fund approach, how much do you have to save each month to buy a $4,800 car one year from now?

Interest paid on interest previously earned

This principle suggests that a certain amount of money today has different buying power than the same amount of money 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 ʺvalueʺ of the money.

When a person intentionally invests money in a place where it can earn more money

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.

The saving habits of Ben and Arthur best illustrate which principle of saving?

Which of these is not a key to saving money?

Why should interest earned NOT be a factor with your emergency fund?

The persistent rise in the cost of goods and services

When youʹre in high school, you wonʹt have the same emergency expenses as your parents.

An interest-bearing account is an account that generates interest income on the available balance in the account.

Save a $500 emergency fund

Americans typically maintain a very high savings rate.

Instead of borrowing money for large purchases, you should set money aside in a ______over time and pay with cash

Saving is about:

You should keep your emergency fund in the same account as your spending money.

For which of the following should you save

Which of the following is NOT one of the three basic reasons for saving money?

When youʹre older and out of school, youʹll need to grow your emergency fund into a full three to six monthsʹ worth of expenses.

Percentage paid to a lender for the use of borrowed money, or the percentage earned on invested principal

Which of the following steps is the First Foundation?

At your age, a fully funded emergency fund should be