Ramsey Classroom Chapter 3

Emergency

47% of Americans have less than $1,000 saved for a(n) ______.

Are paying for things in your past

You'll have less freedom with money if you...

Save it until you have an emergency

Once you have a $500 emergency fund, you should...

Decide how much you'll have to save and the time frame you want to save it in

The first step you should take when you want to make a large purchase is...

Once you're out of college, living debt-free, and 3-6 months of living expenses saved

The best way to build wealth is to start investing early. You should start investing money...

Because the bank pays you to use your money

Why do some accounts, like savings accounts at your local ban, earn interest?

When

It's not IF an emergency will happen, but ____.

Live on less than you make

If you really want to save money, you've got to...

A savings account or money market account

The only place you should keep your emergency fund is...

True

If people saved the equivalent of a car payment each month for a year or two (instead of spending it on payments and interest), they could have enough money to buy a car with cash for much cheaper!

Consistently investing money and patience to give it time to grow

Which two habits are the most important for building wealth and becoming a millionaire?

How quickly your money will grow over time

The interest rate on a savings account determines...

False

Debt is a tool to make you wealthy

True

You should budget in this order: giving, savings, spending.

Be able to cover an unexpected expense with cash and protect you from having to pile up debt when something goes wrong.

The purpose of an emergency fund is to...

By showing you only the monthly payment, they make the product seem affordable.

Why do stores rarely advertise the full price of big purchases like smartphones?

Compound growth

______ is a millionaire's best friend.

Compound growth

Compound interest is earned at a fixed rate, while ____ is an average based on an investment's past performance.

To have cash on hand for unexpected events

What is the goal of an emergency fund?

emergencies, large purchases and wealth building

The main reasons for saving your hard earned money are...

3-5 months of living expenses

Once you're out of school, have started your career, and have zero debt, your emergency fund should have ______.

Pay cash for car

What is the Third foundation?

Accountants, engineers, teachers

The top three careers reported among millionaires were _____.

False

In order to outpace inflation when investing, your investments need to have a lower rate of return than the rate of inflation

Easier

While saving money isn't easy at first, it will make your life a lot _______ in the future if you make it a habit now.

False

Most millionaires make over $100,000 a year

Your car battery died

Which of these would count as a legitimate reason to use your emergency fund?

Accrued interest

The amount of interest charged on a debt but not yet collected is called...

Give it to those in need

One of the main reasons we build wealth is so that we can...

Inflation

Which principle says that a certain amount of money today is worth more than the same amount in the future?