ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Audra wants a new $750 tablet, so she finds a part-time job tutoring grammar and saves $100 a month.
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Jon and his wife have saved $950, 000 for their retirement.
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Miranda and her husband want to purchase a new home, so they begin saving $350 a month for a future down payment.
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Beth wants to take her family on a vacation to Europe, so she starts saving $400 a month to pay for their trip the following year.
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Nick wants to pay cash for his next vehicle, but he does not have a plan for saving money each month.
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Detailed explanation-1: -First and foremost, saving money is important because it helps protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, leave a financial legacy, and provide you with a greater sense of financial freedom.
Detailed explanation-2: -A budget helps create financial stability. By tracking expenses and following a plan, a budget makes it easier to pay bills on time, build an emergency fund, and save for major expenses such as a car or home. Overall, a budget puts a person on stronger financial footing for both the day-to-day and the long term.
Detailed explanation-3: -What Is the 30-Day Rule? Instead of allowing yourself to make that impulse purchase, wait for 30 days before you buy-that’s the 30-day rule. Following this rule means you defer all non-essential purchases for 30 days, which gives you ample time to think about whether you really need to make the purchase.
Detailed explanation-4: -Our 50/30/20 calculator divides your take-home income into suggested spending in three categories: 50% of net pay for needs, 30% for wants and 20% for savings and debt repayment. Find out how this budgeting approach applies to your money.