UNCOMMON CENTS 64

SAVVY CAL'S 1ST SEMESTER FINANCES TEST:
1. WHO DO YOU PAY FIRST? YOURSELF
2. HOW DO YOU PAY #1? CASH
3. WHAT'S THE 3RD 'ROAD TO WEALTH' RULE? AVOID DEBT
4. HOW MANY MONTHS CASH SHOULD YOU PUT INTO RESERVE IN BANK?
THREE TO SIX MONTHS. FOR EX., $2000 A MONTH INCOME = $6000.00 BANKED. P.S. AFTER WHICH THE FUN GAME OF INVESTING MAY BEGIN.
5. WHAT PERCENT OF SALARY SHOULD YOU SAVE EACH MONTH? 15%
6. IS A 401K AN INVESTMENT ACCOUNT? EXPLAIN. A 401K IS A RETIREMENT PLAN. MONEY YOU CONTRIBUTE FROM EACH PAYCHECK (AND PERHAPS MONEY CONTRIBUTED EQUALLY BY YOUR EMPLOYER) CAN BE PUT INTO ONE OF THREE CHOICES. A FIXED ACCOUNT, SAVINGS, LIKE A CD OR AN INVESTMENT ACCOUNT LIKE A MUTUAL FUND OR INTO COMPANY STOCK. SKIP THE FIRST CHOICES WHICH PROVIDES NO POTENTIAL FOR PROFIT AND THE THIRDWHICH DEPENDS ON THE FINANCIAL SUCCESS OR FAILURE OF YOUR EMPLOYER. CHOOSE THE MIDDLE GROUND, A DIVERSIFIED STOCK FUND FOR LONG-TERM RESULTS.
7. SHOULD YOU INVEST? a. in a savings account, or b. the stock market. YOU HAVE BY NOW GUESSED FROM THE ANSWER TO #6. A BALANCED MUTUAL FUND OF STOCKS.
8. IF ANS. TO 7 IS b. WHAT KINDS OF FUNDS DO YOU RECOMMEND FOR STOCKS? DO I HEAR AN ECHO?
9. IF ANS. TO 7 IS a. WHAT KIND OF SAVINGS ACCOUNT DO YOU RECOMMEND? THE ANSWER TO #7 IS NOT A SAVINGS ACCOUNT BUT BEFORE DISCRETIONARY CASH IS AVAILABLE, CASH RESERVES SHOULD BE PUT INTO A MONEY MARKET FUND BECAUSE IT CARRIES A HIGHER INTEREST RATE THAN A BANK ACCOUNT OR A CHECKING ACCOUNT AND MONEY NEEDED FOR EMERGENCIES MAY BE PROMPTLY WITHDRAWN.
10. WHICH QUESTION IS MOST INFLUENTIAL OUT OF THESE TOP 10? I HOPE YOU UNDERSTOOD THAT SAVVY CAL MEANS 'IMPORTANT' HERE. ANSWER: PAY YOURSELF FIRST.

AFTER THIS TOP 10 COUNTDOWN - REMEMBER DAVID LETTERMAN'S HUMOROUS SCALE - YOU MIGHT ASK YOURSELF WHETHER HOME, AUTO OR LIFE INSURANCE ARE NECESSARY. YOU MIGHT ASK YOURSELF IF YOU NEED A WILL EVEN AT AN EARLY AGE. HINT: 3 OUT OF THESE 4 ARE MUST HAVE'S. WHAT ARE THEY? HOME, AUTO AND A LIVING WILL.
ESSAY QUESTION: CITE 10 EXAMPLES OF YOUR SILLY SPENDING. I DID MY PART HERE WITH THE CAUTIONARY TALE OF THE UNFATHOMABLE GAS GUZZLER ACROSS MY LANE. BY THE WAY, THE TRUCK IS OFTEN ACCOMPANIED BY ANOTHER TRUCK FOR THE SHORT TRIPS.
K.I.S.S.