ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Pay yourself first
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Fixed expense
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Balanced budget
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Emergency fund
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Detailed explanation-1: -Most experts believe you should have enough money in your emergency fund to cover at least 3 to 6 months’ worth of living expenses. Start by estimating your costs for critical expenses, such as: Housing. Food. Health care (including insurance).
Detailed explanation-2: -An emergency fund is a cash reserve that’s specifically set aside for unplanned expenses or financial emergencies. Some common examples include car repairs, home repairs, medical bills, or a loss of income.
Detailed explanation-3: -Emergency savings should be placed in an account that is easily accessible, so you do not incur early-withdrawal penalties as you would with an account such as a certificate of deposit (CD) or Individual Retirement Account (IRA).
Detailed explanation-4: -Set several smaller savings goals, rather than one large one. Set yourself up for success from the start. Start with small, regular contributions. Automate your savings. Don’t increase monthly spending or open new credit cards. Don’t over-save.