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Questions and Answers
What is the recommended ratio for an emergency fund?
What is the recommended ratio for an emergency fund?
- 1-3 months of fixed expenses
- 6-9 months of fixed expenses
- 3-6 months of fixed expenses (correct)
- 9-12 months of fixed expenses
What is the purpose of setting up 'overdraft protection' against your checking account or credit card?
What is the purpose of setting up 'overdraft protection' against your checking account or credit card?
- To earn competitive interest rates
- To avoid accidentally bouncing a check or withdrawal (correct)
- To transact easily between accounts
- To pay monthly bills
What are some factors that may require you to have a higher amount in your emergency fund?
What are some factors that may require you to have a higher amount in your emergency fund?
- Having low deductibles on your insurance
- Being self-employed or having minimal job security (correct)
- Having a high credit card limit
- Having partially liquid funds like Roth IRA contributions
Which type of account is preferred by individuals who want their savings to feel less accessible?
Which type of account is preferred by individuals who want their savings to feel less accessible?
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What is the recommended strategy for saving money for different purposes?
What is the recommended strategy for saving money for different purposes?
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When might a CD (Certificate of Deposit) be appropriate?
When might a CD (Certificate of Deposit) be appropriate?
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What is compound interest?
What is compound interest?
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