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Basics Beginner: Financing a Major Purchase

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1.
The first step in financing a major purchase is to ________.
Choose wisely. There is only one correct answer.
Establish a household budget. That way, you can see how and where the planned purchase can be fit into your overall financial picture.
2.
Which of the following statements is true?
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Experts recommend building an emergency fund equal to three to six months worth of living expenses. An emergency fund should be your first savings priority, in case an unplanned major purchase becomes necessary. All of the other answers are false.
3.
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.
4.
A major purchase is a _______ expense.
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Variable. It is variable because you dont normally buy it on a regular basis.
5.
If you want to save for a big purchase over the long term, which of the following options is likely to fluctuate in value the least?
Choose wisely. There is only one correct answer.
Certificates of deposit. As a general rule, certificates of deposit are the least likely of these to fluctuate in value.