CFL Unit 3 Review Game

What is the definition of saving?

• Accumulation of excess funds by intentionally spending less than you earn

• Spending all your income on consumption

• Borrowing money for future expenses

• Investing in stocks and bonds

What is the definition of savings?

• Portion of income not spent on consumption

• Money borrowed from a bank

• Funds used for daily expenses

• Investments in real estate

Why is it important to have emergency savings?

• To cover the cost of unexpected events

• To invest in the stock market

• To pay for luxury vacations

• To buy a new car

What is a reason to save for short-term goals and expenses?

• To pay for items that aren’t part of a typical spending plan

• To invest in long-term assets

• To pay off a mortgage

• To buy groceries

How does saving contribute to financial security?

• By lowering stress and negative emotions

• By increasing debt

• By reducing income

• By eliminating all expenses

How does saving reduce financial risk and uncertainty?

• By contributing to net worth

• By increasing liabilities

• By spending more on consumption

• By avoiding all investments

What factors determine how much money should be saved?

• Income, dependents, job security, insurance coverage

• Age, gender, location, education

• Hobbies, interests, lifestyle, travel plans

• Friends, family, social status, popularity

What is the term for earning interest on previously earned interest?

• Simple interest

• Compounding interest

• Fixed interest

• Variable interest

What is the original amount of money saved or invested called?

• Interest

• Dividend

• Principal

• Profit

Which of the following is a characteristic of a financial plan?

• Increases future financial uncertainty

• Reduces future financial uncertainty

• Increases negative emotions

• Eliminates trade-offs