| A | B |
|---|
| Baby Steps | The seven steps to a healthy Financial Plan. |
| Compound Interest | Interest paid on interest previously earned; credited daily, monthly, quarterly, semi-annually or annually on both principal and prevously credited interest. |
| Emergency Fund | 3 to 6 months of expenses in readily available cash to be used only in the event of an emergency. |
| Interest Rate | percentage paid to a lender for the use of borrowed money |
| Money Market | mutual fund that seeks to maintan a stable share price and to earn current income by investing in interest-bearing instruments with short-term maturities. |
| Sinking fund | saving money for a specific purpose to allow interest to work for you rather than against you. |
| benefits of having emergency fund | less stress, prepared for unexpected, rainy day umbrella |
| 3 basic reasons for saving money | emergency fund, purchases, building wealth |
| First baby step | save $1,000 or $500 in an emergency fund |
| 7th baby step | Build wealth and give |
| 2nd baby step | pay off all debt except the house |
| 3rd baby step | 3-6 months in savings |
| 4th baby step | invest 15% of income for retirement |
| 5th baby step | college funding |
| 6th baby step | pay off home early |
