Saving

Saving is essential to building your long-term wealth, and it is important to save early in life and often. Regardless of your age, you should save a percentage every time you receive money, whether it’s from a paycheck or a monetary gift. The everyday decisions you make about money can have a lifelong impact. Saving allows you the freedom and flexibility to fulfill your goals and helps you develop good personal finance habits.

Not a natural saver? No problem. Getting started is easy. There are many ways to scale back your spending and various resources to help. Start small and see how quickly your money can grow.

First, let’s test your saving knowledge.

Quick Quiz

Whether you’re a novice or an expert, this quiz gives you the opportunity to test your knowledge, determine areas for improvement and learn helpful tips and resources to guide you through the process of becoming a savvy saver. Take the quiz to help evaluate your saving habits.

An emergency fund is:

Insurance that pays medical expenses

A fire escape plan

A savings plan for unexpected expenses

A fund for dining out

Correct!

An emergency fund helps you save for unexpected expenses such as medical or home and auto repair.

Not quite.

An emergency fund is money saved for unexpected expenses such as medical or home and auto repair.

Ideally, how much should you save in your emergency fund?

A week's pay

A month's pay

Enough to pay rent for two months

Enough to pay three to six months' expenses

Correct!

You should save enough in your emergency fund to pay three to six months’ expenses.

Not quite.

You should have enough money in your emergency fund to sustain you for three to six months.

What is true about savings accounts?

They pay the highest interest rates of any account.

They allow you to deposit and withdraw funds

Their interest earnings are not taxable.

All of the above

Correct!

Savings accounts allow you to deposit and withdraw funds and earn interest.

Not quite.

Savings accounts allow you to deposit and withdraw funds and earn interest.

You should consistently save at least ___ of your income.

10-12%

30%

Correct!

Saving at least 10 percent of your income each month gives you a safety net for retirement and other unexpected expenses.

Not quite.

You should consistently save at least 10 percent of your income.

Which is not a retirement savings option?

401(k) plan

Emergency fund

Health Savings Accounts (HRAs)

Individual Retirement Arrangements (IRAs)

Correct!

While it’s important to have money in an emergency fund, it shouldn’t be where you keep your retirement savings. Accounts like 401(k)s, HRAs and IRAs are all ways to maximize growth and save for retirement.

Not quite.

Your Score

Nice job!

You’re a savvy saver — check out these tips to stay successful.

Nice job!

You’re on the path to becoming a savvy saver — check out these resources to become even better at saving.

Too Bad!

You’re a newbie with lots of saving potential — check out these resources to become a great saver.