Save for the Rainy Day! – Answer Key & Explanations
1. Which of the following is not an emergency expense?
A. A flat tire
B. A surprise medical bill
C. Concert tickets
D. A leaking water heater
Correct Answer: C. Concert tickets
Explanation: Concert tickets, while enjoyable, are considered non-essential. Emergency expenses are unexpected, urgent, and necessary—such as a broken appliance, medical bill, or car trouble. Preparing for these events protects your financial stability and reduces stress during uncertain times.
2. How many months of essential expenses should your emergency savings ideally cover?
A. One month
B. Three to six months
C. A year’s worth of income
D. Two weeks of takeout
Correct Answer: B. Three to six months
Explanation: Financial experts recommend saving three to six months of your essential living expenses. This cushion gives you time to recover from a job loss, illness, or unexpected setback without relying on credit cards or loans.
3. You receive an unexpected $250. What’s the smartest first move?
A. Spend it on a mini vacation
B. Let it sit in your checking account
C. Add it to your emergency savings
D. Upgrade your streaming service
Correct Answer: C. Add it to your emergency
savings
Explanation: Building your emergency fund is one of the most effective ways to increase financial resilience. Putting extra money into savings ensures you’re better prepared for future challenges—planned or unplanned.
4. Emergency savings are meant to help:
A. Just you
B. Your family
C. Your pets
D. All of the above
Correct Answer: D. All of the above
Explanation: Your emergency fund supports more than just you. It helps cover expenses for your household, dependents, and even pets. If others rely on you, your savings help protect them too.
5. True or False:
Emergency funds are only for people with kids or mortgages.
Correct Answer: False
Explanation: Everyone needs an emergency fund—regardless of age, income, or family size. Life happens to all of us. Whether it’s a job loss, medical emergency, or unexpected repair, having savings set aside offers peace of mind and financial independence.
6. What’s a powerful reason to build your emergency fund today?
A. Because emergencies are expensive
B. Because it reduces stress
C. Because your family (and pets) rely on you
D. All of the above
Correct Answer: D. All of the above
Explanation: All of these reasons are true. Emergency savings reduce financial anxiety, protect the people who depend on you, and give you the ability to handle life’s unexpected moments with confidence.