Home > Basics > Beginner
Basics Beginner: 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.
An advantage to using an automatic savings account to build an emergency fund is that it _______.
Choose wisely. There is only one correct answer.
Saves you time and energy on finding money to save. Putting your saving on automatic can free up time for other financial planning.
2.
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.
3.
Treating your emergency fund as a bill to be paid gives it an element of priority.
Choose wisely. There is only one correct answer.
True. Usually, we can find money to pay our bills.
4.
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.
5.
Where is the best place to keep an emergency cash fund?
Choose wisely. There is only one correct answer.
Keep your emergency cash fund in a savings account or money market account. These types of accounts are the most accessible in case of an emergency.