ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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emergency savings
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saving
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savings
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interest
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Detailed explanation-1: -What is an emergency fund? 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-2: -A sudden illness or accident, unexpected job loss, or even a surprise home or car repair can devastate your family’s day-to-day cash flow if you aren’t prepared. While emergencies can’t always be avoided, having emergency savings can take some of the financial sting out of dealing with these unexpected events.
Detailed explanation-3: -An emergency fund is a financial safety net for future mishaps and/or unexpected expenses. Emergency funds should typically have three to six months’ worth of expenses, although the 2020 economic crisis and lockdown has led some experts to suggest up to one year’s worth.
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.
Detailed explanation-5: -Housing. Food. Health care (including insurance). Utilities. Transportation. Personal expenses. Debt.