Emergency Fund
Money set aside to cover unexpected expenses or emergencies.
What is an emergency fund?
Decide what you’re saving for and how much you need.
What’s the first thing to do when setting a savings goal?
Making payments on debt from things you already bought.
What does it mean to “pay for things in your past”?
Plan how much to save and the timeline for saving.
What’s the first step before buying something expensive?
Saving is short-term and safe; investing is long-term and can grow money with risk.
What’s the difference between saving and investing?
$500
How much should your starter emergency fund be?
Focus on paying off debt.
What is the second foundation?
Because future income is tied up in payments.
Why does debt reduce your financial freedom?
Sell something or pick up extra work.
What’s a good alternative to borrowing money for a large purchase?
After you’re out of debt and have 3–6 months of expenses saved.
When should you start investing?
45%
What percent of Americans have less than $1,000 saved for emergencies?
It helps you build financial stability and independence.
Why is saving money important even if you don’t make a lot?
True or False: Using credit cards helps you build freedom with your money.
False
You end up paying more with interest and risk falling into debt.
Why should you avoid using credit cards for big purchases?
Start investing early and consistently.
What’s the best way to build wealth over time?
It defeats the purpose—then you won’t have it when a real emergency happens.
Why should you avoid using your emergency fund for non-emergencies?
What can help you save money automatically each month?
Setting up automatic transfers to your savings account.
What is one way to avoid going into debt.
Pay cash, save ahead, or avoid impulse purchases.
It breaks the goal into manageable steps and keeps you motivated.
How can setting smaller savings goals help you reach a big one?
Fear, debt, or lack of knowledge.
What’s one reason people wait too long to invest?
Real Example: car repair, medical bill; Fake Example: new shoes, concert ticket
What are two examples of a real emergency and one example of a fake one.
It gives your money a purpose and keeps you focused on goals.
How can having a savings plan help prevent impulse spending?
More financial freedom and ability to build wealth.
What’s the long-term effect of avoiding debt and building savings early?
Short: concert tickets; Long: car or college.
What’s an example of a short-term savings goal vs. a long-term one?
You earn interest on both your initial money and the interest it earns over time.
How does compound interest work to your advantage?