Savings and Investments

Which of the following is an example of an investment?

• • a) Buying a new video game

• • b) Putting money in a savings account that earns interest

• • c) Spending all your money on candy

• • d) Keeping your money under your mattress

Why might someone choose to save their money in a bank rather than keeping it at home?

• • a) Because a bank can keep the money safe and even add more to it through interest

• • b) So they can spend it quickly on whatever they want

• • c) To keep it hidden from others so no one knows they have money

• • d) To avoid the temptation of spending it on small things every day

Sara wants to buy a new book that costs $15, but she only has $10. What should Sara do if she wants to buy the book without borrowing money?

• • a) Save her $10 and wait until she gets more money to buy the book

• • b) Spend $10 on a different book that she doesn’t really want

• c) Use the 30-day rule

• • d) Both (a) and (c)

Having a "non-spending day" is an investment strategy. State TRUE or FALSE

Which of the following best explains the difference between saving and investing?

• • a) Saving is keeping your money safe for short-term needs, while investing is using your money to try to earn more over a longer period.

• • b) Saving is spending your money on things you want now, while investing is buying items you don’t need.

• • c) Saving is giving your money to others, while investing is hiding your money in a secret place.

• • d) Saving is putting your money under your bed, while investing is putting it in a savings account.