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Basics Beginner: Financing a Major Purchase

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1.
Which of the following statements is true?
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A money market fund is a good savings vehicle for a major purchase. Money market funds are safe, conservative investments that can be accessed quickly, using a check. All of the other answers are false.
2.
How does an automatic savings program work?
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Money is withdrawn on a regular basis from an existing account and transferred to another account. The process is automatic, which makes it relatively easy for you.
3.
A home equity line of credit is typically a revolving line of credit.
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True. HELOCs, as they are called, can be used to finance large purchases.
4.
Budgeting for a major purchase has many advantages; one of them is that _______.
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You may be able to avoid the use of debt. Avoiding debt can save you a lot of money, as well as give you time to think over the purchase.
5.
Credit cards and home equity lines of credit are similar in that they _______.
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Use revolving credit. They both typically make credit available again as you pay down your balance.