Question

If you used money from your emergency fund, which is an appropriate next response? (1 point)

Repay your emergency fund by borrowing against credit cards.
Continue with the saving plan as is, and your emergency fund will eventually return to its previous balance.
Reduce casual spending and increase savings until your emergency fund has been paid back.
O Borrow the money from your friends to pay the emergency fund back.

Answer 1

The appropriate response after using your emergency fund is to reduce non-essential spending and save more until the fund is restored, rather than creating potential debt by using credit cards or borrowing from friends.

Step-by-step explanation:

If you used money from your emergency fund, the appropriate next response would be to reduce casual spending and increase savings until your emergency fund has been replenished. Borrowing money through credit cards or from friends to repay an emergency fund can lead to a debt cycle, which may negatively impact your credit score and overall financial health. Instead, it's advisable to adjust your budget and cut back on non-essential spending to restore the emergency fund, ensuring you're prepared for future unforeseen expenses.

It's also beneficial to practice critical thinking regarding financial decisions. Tallying daily and weekly spending helps to identify areas where you can save more money. Adopting a structured decision-making model like the PACED model may also contribute to more effective money management.

When it comes to debt and savings, it's important to consider the net worth perspective; having a well-funded savings account with no debt is typically more beneficial than holding onto debt. This scenario reflects the concept that dollars are fungible, meaning that each dollar is interchangeable and should be allocated to the most financially beneficial use.

Answer 2

Answer: 1. your emergency fund

2. Reduce casual spending and increase savings until your emergency fund has been paid back.

3. tracking your spending

4. a private foundation

5. 60%

6. a bank savings account

7. a high interest rate

8. the profit earned on the sale of an asset which has increased while it was owned

9. a fund that pools money from many investors to buy securities

10. owning dividend stocks

11. a type of account offered to employees at very little or no cost

12. SEC

13. NCUA

14. 2.8%

15. the money that a person or a country earns

16. water bill

17. your previous budget

18. You buy undervalued assets, which appreciate with time.

19. a stock market index made up of the 500 largest companies being traded in the U.S.

Explanation: I took the same quiz and got 100%, hope it helps!