This type of expenses groups rent, groceries, gas/transportation, phone service, medicine, and insurance
What is essential expenses?
What is the primary purpose of an emergency fund according to the text?
To cover unforeseen circumstances
How Much Should You Keep in Your Emergency Fund?
3-6 month of (essential) expenses
This type of expenses groups streaming subscriptions, eating out, and trendy clothes/accessories...
What is non-essential expenses?
Name at least 2 ESSENTIAL expenditures (expenses):
What is one way to increase your income?
Obtain better scholarships
Find a job that pays more or find a side hustle
Cite an unexpected events that will occur in your life (where you can use the emergency fund for):
Job loss/Change in Income
Natural disaster
Medical or family emergency
Car or Home repair
Travel Disruption
What is a good first step to start building an emergency fund?
Set a small, achievable savings goal and automate contributions
What are some tips to know if its time to use your emergency funds? (at least 2)
Label your emergency fund "Emergency Fund"
Define what expense is eligible for this emergency fund
Postpone 24 hours and reconsider (if possible)
Where is the best place to keep your emergency fund?
In a Savings account (High Yield Savings account if possible)
What is a common mistake people make with their emergency funds?
Using it for non-emergencies
When should you review and adjust your emergency fund amount?
Regularly, and especially after major life changes (e.g., marriage, new job, change in income/expenses)
What does 'liquidity' mean in the context of an emergency fund?
How easily you can access the money without penalty or loss
Should you prioritize paying off high-interest debt or building an emergency fund?
It's often best to do both: build a small emergency fund ($500-$1000) then aggressively tackle high-interest debt