All Courses > Portfolios > 100
Portfolios 104: Building an Emergency Fund

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
You will likely need an emergency fund most when you're not financially stable.
Choose wisely. There is only one correct answer.
True. People who are just starting out are usually most in need of such a fund.
2.
How much money should you keep in an emergency fund?
Choose wisely. There is only one correct answer.
Your emergency fund should cover daily expenses for a period of three to six months at the minimum. If your income fluctuates, or if you're self-employed, you'd be wise to have more emergency cash on hand.
3.
A retirement account is not a good candidate to hold an emergency fund.
Choose wisely. There is only one correct answer.
True. Retirement accounts require years to build up. When you take money out now, you can lose a lot of growth in future years.
4.
When starting an emergency cash fund, it's always best to start with a high amount.
Choose wisely. There is only one correct answer.
False. If you don't get a windfall, you can set aside a comfortable amount, such as 5%. You can always add to it later.
5.
Should you ever consider adding additional money to your emergency cash fund?
Choose wisely. There is only one correct answer.
Yes. If you receive a bonus or raise at work, you should try to add money to your emergency cash fund, before you get used to spending the extra money. You might also consider looking for ways to trim your monthly spending, in order to add to your emergency cash fund.