ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Buy a $25, 000 car
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Pay off $5, 000 in credit card debt in two years
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Buy a house
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Become financially independent
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Detailed explanation-1: -"Pay off $5, 000 in credit card debt in two years” is a meaningful financial goal because it states the action in specific terms (pay off $5, 000 in credit card debt) and sets a target date or deadline (in two years).
Detailed explanation-2: -Examples of different types of financial goals include: Save for retirement and other long-term plans. Save for short-term and mid-term plans. Pay off debt. Build good credit. Make more money.
Detailed explanation-3: -Examples would be paying off credit cards or loans and saving for down payment on a house. Long-term goals. These take much longer than five years to reach. They are things like paying off a mortgage or student loans and funding a retirement plan.
Detailed explanation-4: -Our recommendation is to prioritize paying down significant debt while making small contributions to your savings. Once you’ve paid off your debt, you can then more aggressively build your savings by contributing the full amount you were previously paying each month toward debt.