Savings: Part II & III

Do you think people who make more actually save more?  Think again.  Harris Interactive conducted a survey for CareerBuilder.com [November/December 2006] of 6,169 full time adult workers.  The survey, according to a Reuters news release, found that 19% of workers who make over $100,000 live paycheck to paycheck.

Today we are continuing with our lesson on Savings.  You should continue your Microsoft Word document from yesterday.

  1.  You should save money for three basic reasons:

• ___________________
• ___________________
• ___________________

EMERGENCY FUND

  2.  _________________ are going to happen.  Count on it.

  3.  Baby Step 1, a beginner emergency fund, is __________________ in the bank (or $500 if your household income is below $20,000 per year).

  4.  Baby Step 3 is a fully funded emergency fund of __________ of expenses.

  5.  A great place to keep your emergency fund is in a __________ ___________ account from a mutual fund company.

  6.  Your emergency is NOT an _____________, it's ______________.

  7.  Do not ______________ this fund for purchases.

  8.  The emergency fund is your ______________ savings priority.  Do it quickly!

  9.  The second thing you save money for is ______________.

PURCHASES

  10.  Instead of __________ to purchase, pay cash by using a __________ __________ approach.

  11.  What is the average monthly car payment in the U.S.?

After the video is over, take a few minutes to answer the following questions:

  12. What is a "sinking fund"?

  13. Why isn't "90 days same as cash" really "the same as cash".

Knowledge of the importance of an Emergency Fund has been around for centuries.  Consider the quote:

"In the house of the wise are stores of choice food and oil, but a foolish man devours all he has." -- Proverbs 21:20

WEALTH BUILDING

  14.  The third thing you save money for is __________ __________.

  15.  _____________ is a key ingredient when it comes to wealth building.

  16.  Building wealth is a __________________, not a sprint.

  17.  Pre-___________________ (PACs) withdrawals are a good way to build in discipline.

  18.  __________ ___________ creates a mathematical explosion.  You must start _________.

After the video is over, take a few minutes to answer the following questions:

  19.  Discuss the idea of "Wants vs. Needs" in a short paragraph.

  20.  Discuss why someone who put less money into savings ended up with almost a million dollars more than someone who put in more money for more years.

Why worry about what "might" happen?  Consider the quote:

"If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them." -- Zig Ziglar

Save your assignment, print it out, and turn it in to the box.