Savings Basics
This is the practice of setting aside money now to use in the future.
What is saving
This is a plan for how you will spend and save your money.
What is a budget
This bank account is mainly used for everyday spending and paying bills.
What is a checking account
This strategy means saving money before spending it on other things.
What is pay yourself first
Money owed to lenders that must be repaid with interest.
What is debt?
Money set aside specifically for unexpected expenses like medical bills or car repairs.
What is an emergency fund
In the 50/30/20 rule, this percentage of income is recommended for savings.
What is 20%
This account is designed for storing money and earning interest over time.
What is a savings account
Setting up automatic transfers from checking to savings is called this type of saving.
What is automatic saving
When housing, food, and bills take up most of a person’s income, it becomes difficult to save due to these.
What are high living expenses
Financial experts often recommend saving this many months of living expenses for emergencies.
What is 3–6 months
Expenses like rent, groceries, and utilities fall into this category of spending.
What are needs
This type of account often offers higher interest rates than a regular savings account.
What is a high-yield savings account
This spending habit involves buying items without planning and can hurt saving efforts.
What is impulse buying
Unexpected costs like medical bills or car repairs are often called this type of financial situation.
What are emergencies
This term describes money earned on savings kept in a bank account.
What is interest
Money spent on entertainment, hobbies, or eating out is considered this category.
What are wants
A bank account where money is locked for a fixed period to earn interest.
What is a Certificate of Deposit (CD)
Reducing things like unused streaming services is an example of cutting these.
What are unnecessary subscriptions or expenses
This problem occurs when someone spends money without planning or budgeting.
What is poor spending control or impulse spending
Saving regularly over time helps people achieve these things, such as buying a car or going to college.
What are financial goals
This budgeting step involves recording every purchase to see where your money goes.
What is tracking expenses
This employer-sponsored retirement savings plan is common in the United States.
What is a 401(k)
This financial habit involves planning income and expenses each month to manage money better.
What is budgeting
Not understanding how budgeting, saving, or banking works is known as a lack of this.
What is financial literacy