Ch 1- Savings Flashcards
Define amoral
has no morals
Define baby steps
the 7 steps to a healthy financial plan
Define compound interest
interest paid on interest previously earned
Define emergency fund
3-6 months of expenses in readily available cash for emergencies
Define interest rate.
percentage paid to a lender for the use of borrowed money
Define money market
mutual fund that seeks to maintain a stable share price to earn current income by investing in interest
Define Murphy’s Law.
anything that can happen will happen
Define Pre-Authorized Checking (PAC).
system of automatic payment processing
Define priority
level of high importance or urgency
Define sinking fund.
saving money in order to make interest work for you not against you
For most people a fully-funded emergency fund will be about…?
$10,000-$15,000
What are 3 reasons you should save money?
emergency fund, purchases, wealth building
How many baby steps are there?
7
What is saving about?
contentment & emotion
What does Pre-Authorized Checking (PAC) do?
helps build discipline when saving