| A | B |
|---|
| First Foundation | Save a $500 emergency fund |
| greatly affects your saving habits | behavior |
| should hold off on investing for retirement until | college or other post-secondary education paid for |
| 3 basic reasons to save money | emergency fund, large purchases, building wealth |
| At your age, a fully funded emergency fund should be this amount | $500 |
| should use this fund instead of borrowing money for large purchases | sinking |
| this fund should be separate from your spending account | emergency |
| lack of discipline, lack of focus, not living on a budget | reasons people don't save money |
| principle suggests that a certain amount of money today has different buying power than the same amount of money in the future | time value of money |
| an account that generates interest income on the available balance in the account | interest-bearing account |
| total amount to be paid divided by 12 months in a year | = amount must save per month |
| . Money set aside and left alone for a "rainy day. | Emergency fund |
| Saving money over time for a large purchase | Sinking fund |
| Percent paid to a lender for the use of borrowed money, or the percentage earned on invested principal | Interest rate |
| Money today has different buying power than the same amount of money in the future | Time value of money |
| Interest paid on interest previously earned | Compound interest |
| Compares after-tax income to the money people spend on a variety of items | Savings rate |
| The five steps to financial success | Five Foundations |
| Save a $500 emergency fund | First foundation |
| When a person intentionally invests money in a place where it can earn more money | Wealth building |
| The persistent rise in the cost of goods and services | Inflation |
| after you graduate school, you emergency fund should cover this amount of time's worth of expenses | 3-6 months |
| Spending more money than you make and acquiring debt | negative saving rate |
| saving is about | Contentment and emotion |
| American's typically maintain this level of savings | VERY low |
| purpose of this is to set money aside for unexpected financial emergencies and to provide a sense of financial security | emergency fund |
| interest earned is important in several saving and investing funds BUT NOT in | an emergency fund |
| first thing you should save for | emergency fund |
