Emergencies
The first foundation.
What is save a $500 emergency fund?
The percentage of principal charged by the lender for the use of its money.
What is interest?
The fourth foundation.
What is pay cash for college?
A purchase that requires a significant amount of money.
What is a large purchase?
The initial amount of money invested or borrowed.
What is principal?
The difference between a financial emergency and a non-emergency.
Non-emergencies you can see coming up, emergencies are unexpected, you pay for emergencies because you have to not because you want to.
Prom is five months away and you plan to spend $200 on a dress. This is the amount you will need to save each month.
What is $40?
The fifth foundation.
What is building wealth and giving?
The time in which you should start saving.
When is while you're young?
Interest paid on interest previously earned.
A few ways you can save $500.
What are selling stuff, finding a job, tutoring, earning cash, etc?
What are some common large purchases that offer financing or payment options you should avoid?
Furniture, appliances, cars, smartphones, etc.
The average rate of growth for an investment over time; often expressed as an annual figure.
What is compound growth?
The point in budgeting in which you should factor in saving.
What is after income and giving, but before expenses?
The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment.
What is rate of return?
The three questions that help determine if something is actually an emergency.
Is it urgent? Is it necessary? Is it unexpected?
The amount of interest charged on a debt but not yet collected; interest accumulates from the date a loan is issued.
What is accrued interest?
The two elements needed to build wealth through compound growth.
What is money invested and time?
The three reasons you should save money.
What are emergencies, large purchases, and wealth building?
The persistent rise in the cost of goods and services over time.
What is inflation?
How does Murphy's Law apply to money?
When you don't make a plan to save money and you run into a tight spot, you won't have money saved to cover the issues.
Explain why making payments on a car is such a poor financial decision.
The average monthly car payment is around $500 and a car's value goes down quickly.
The main differences between saving and investing.
Saving is short-term, investing is money put away for longer than 5 years (often more like 20-30 years)
Savings are usually savings accounts or money market accounts, investing involves things like 401k.
List reasons why being a natural spender or saver affect your ability to save.
Spenders will find it more difficult to save money, while it'll come more naturally to a saver.
The concept that an amount of money is worth more today than in the future due to earning potential.
What is the time value of money?