Vocabulary
Five Foundations
True/False
Saving
Misc.
100
Interest paid on interest previously earned is...
compound interest
100
According to the Five Foundations, what is the first thing you need to do?
Save $500 for your Emergency Fund
100
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 your spending is done.
False
100
Which of these has little to do with whether or not you save money?   

         Your Behavior?   OR   Your Income?

Your Income
100
Instead of borrowing money (or using a credit card) for large purchases, you should set aside money in what kind of account, then pay with cash when you've saved enough for the item?
Sinking Fund
200
Percentage paid to a lender (banker) for the use of money you've borrowed, or the percentage earned on money you've invested (principal) is...
interest
200
According to the First Foundation, how much money should you save?
$500
200
When you are in high school, you have basically the exact same expenses as your parents.
False
200
Give ONE good reason why Americans are BAD at saving money.
Accept any of these answers: lack discipline, don't live on a budget, lack financial education, impulsive, avoid money decisions, tend to be spenders
200
Which is more LIQUID?


Savings Account OR Certificate of Deposit

Savings Account
300
Saving money over time for a large purchase is called...
sinking fund
300
The First Foundation has you save money. What is the money for?
Emergencies!
300
You should keep your emergency fund money the same account as your spending money so it is easy to access.
False
300
Give TWO purposes of having an Emergency Fund.
Accept any TWO of the following answers: 

1. To pay cash for unexpected expenses/emergencies 

2. To provide a sense of security

3. To keep from using credit cards 

4. To stay out of debt

Others? 

300
If you decide to save up money to purchase a $1200 computer one year from now, how much do you need to save each month to meet your goal?
$100 

* Be sure you know how to figure that out mathematically. The one on the test is a little more difficult.

400
The persistent rise in the cost of goods and services is...
inflation
400
Is the First Foundation intended to BUILD WEALTH?
No, it's to keep you from having to go into debt
400
As an adult, you'll need a larger Emergency Fund.
True
400
Why should you not worry about getting a high rate of interest on the savings account where you put your Emergency Fund money?
The Emergency Fund isn't intended to grow wealth. It's strictly for emergencies.
400
What are the THREE basic reasons for saving money?
1. Emergency Fund  2. Purchases  3. Building Wealth
500
Money today has different buying power than the same amount of money in the future. What term/phrase best describes this?
Time Value of Money
500
What is the 5th foundation?
Build Wealth and Give
500
A "Fully Funded" Adult Emergency Fund is how much?
3-6 months of their salary
500
The savings principle illustrated by the Ben and Arthur example showed that two factors made Ben "richer" than Arthur. What were those two factors?
1. Time

2. Compound Interest

500
What do the letters in FDIC stand for?
Federal Deposit Insurance Corporation
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