ECONOMICS
BUDGETING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Set aside money for emergencies or essential spending in case of a loss of income.
|
|
|
Set aside money to use to treat yourself to something special when the weather turns bad.
|
|
|
Put a fixed amount of money into a savings account each time it rains.
|
|
|
Save up money to buy an umbrella and other types of rain gear.
|
Detailed explanation-1: -A rainy day fund is savings that’s generally for expected, occasional expenses-events and things that you don’t necessarily account for in your monthly budget but that are expected to happen over time. This list can include occasional expenses such as minor car repairs, routine medical expenses and home maintenance.
Detailed explanation-2: -A rainy-day fund is smaller than an emergency fund and is often used for one-time small, unexpected expenses. A rainy-day fund should generally have $500-$1000 to ensure you have enough cash on hand to cover things such as car repairs, new appliances, etc. without affecting your monthly budget.
Detailed explanation-3: -Some common examples include car repairs, home repairs, medical bills, or a loss of income. In general, emergency savings can be used for large or small unplanned bills or payments that are not part of your routine monthly expenses and spending.
Detailed explanation-4: -An emergency fund is a bank account with money set aside to pay for large, unexpected expenses, such as: Unforeseen medical expenses. Home-appliance repair or replacement. Major car fixes.