New PF (2)

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

• New video game that just came out

• An unlimited data plan for your smartphone

• A fancy dinner with friends

• Repairing your car after an accident

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

Which of the following is an investment?

• Money deposited into a checking account

• Money deposited into a 401(k) (retirement) account

• Money you are planning to spend on a new car

• Money you are planning to spend on a trip

Each of the following is a good reason you should contribute regularly to a savings account EXCEPT:

• To use as a spending tool for your expenses each month

• Work toward saving enough for a car or home down payment

• Avoid borrowing money or paying credit card interest by having enough savings to pay cash for new smartphone

• Reduce amount of student loans needed by saving in advance for college

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

• 5%

• 20%

• 45%

• 80%

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

Why is investing a better option than saving when it comes to planning for retirement?

• Investing usually has lower interest rates, so it offers a better deal

• Investing is guaranteed to produce the large sum of money needed for a happy retirement

• Investing begins as soon as you open a bank account, so you can start early in life

• The stock market historically has returns higher than the rate of inflation, so your money can actually grow

According to experts, your emergency fund should include enough money to cover your expenses for…

• 3 to 6 days

• 3 to 6 weeks

• 3 to 6 months

• 3 to 6 years

Which of the following is a good reason to start saving for retirement in your early 20s?

• You'll benefit substantially from compounding interest over all those years

• You might have student loan debt to pay off as well

• Banks typically offer young people higher interest rates, so you'll earn more interest

• Banks typically offer young people lower interest rates, so you'll pay less in interest

Which of these is NOT a known reason that people impulse shop?

• A sense that the product will make your life substantially better

• Strategic pricing and ads that lead you to believe that if you buy now, you'll save overall

• A concern about inflation and its impact on the future cost of goods

• The fear of missing out on a great deal