ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Second Foundation
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First Foundation
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Third Foundation
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Fourth Foundation
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Detailed explanation-1: -The First Foundation is to save a $500 emergency fund. To have a negative savings rate means spending more money than you make and acquiring debt. The key to saving money is to: focus, make saving a habit and a priority, and discipline. Your income is not a key to saving money.
Detailed explanation-2: -Emergency funds create a financial buffer that can keep you afloat in a time of need without having to rely on credit cards or high-interest loans. It can be especially important to have an emergency fund if you have debt, because it can help you avoid borrowing more.
Detailed explanation-3: -Here’s how to make that work for your goals. How much to save will vary, depending on your income and cost of living. An emergency fund should be invested in cash or cash equivalents that won’t be exposed to risk.
Detailed explanation-4: -How much should you save? While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months’ worth of expenses.