Emergency funds MCQs

  1. What is an emergency fund?
  2. Money set aside for planned expenses
    Money invested in stocks and bonds
    Money set aside for unexpected expenses
  3. How much money should you have in your emergency fund?
  4. 3 months' worth of expenses
    6 months' worth of expenses
    1 month's worth of expenses
  5. What type of account should you use for your emergency fund?
  6. Checking account
    Savings account
    Retirement account
  7. Why is it important to have an emergency fund?
  8. To prepare for unexpected expenses
    To fund vacations and luxury expenses
    To save for retirement
  9. How should you calculate your emergency fund?
  10. Based on your income
    Based on your debt
    Based on your expenses
  11. How often should you review and adjust your emergency fund?
  12. Every year
    Every 6 months
    Every 3 months
  13. What are some examples of unexpected expenses?
  14. Car repairs, medical bills, and home repairs
    Vacations, gifts, and hobbies
    Food, clothing, and entertainment
  15. What is the purpose of an emergency fund?
  16. To pay for everyday expenses
    To cover unexpected expenses
    To invest in the stock market
  17. Can you use credit cards as an emergency fund?
  18. Yes, but it's not recommended because of high interest rates
    No, credit cards are not a reliable source of emergency funds
    Yes, as long as you pay off the balance in full each month
  19. What is the opportunity cost of not having an emergency fund?
  20. Not being able to afford everyday expenses
    Having to pay higher interest rates on loans
    Having to rely on credit cards or loans for unexpected expenses
  21. How can you build your emergency fund quickly?
  22. Take out a loan
    Use credit cards
    Sell items you don't need
  23. What should you do if you have to use your emergency fund?
  24. Ignore it and hope you won't need it again
    Immediately start rebuilding it
    Cut back on expenses to avoid using it again
  25. What is the recommended location for storing your emergency fund?
  26. Under your mattress
    In a checking account with your regular funds
    In a savings account at a different bank
  27. What should you do if your expenses increase or decrease?
  28. Adjust your emergency fund accordingly
    Leave your emergency fund the same
    Invest your emergency fund in the stock market
  29. Should you use your emergency fund to pay off debt?
  30. Yes, if you have high-interest debt
    It depends on the amount of debt and your other financial goals
    No, it's better to focus on building your emergency fund