Question

which of the following is an effective strategy for personal saving? *
wait until the end of the month and save whatever is left in your checking account
save a certain percentage of each paycheck and deposit it directly into a savings
account
take out a payday loan so you can save before you receive your paycheck
pay for everything you want and then save the rest.
which statement is false? *
if the bank is fdic - insured, your money, up to the fdic limit, is safe even if the bank
fails
many banks pay interest on the money you deposit into your savings account
historically, savings accounts earn higher returns than investments in the stock
market
money in a checking account is usually easy to access via atm, debit card or check

Explanation:

• For the first question: Saving a certain percentage of each paycheck (pay - yourself - first principle) is a disciplined approach. Waiting until the end of the month may result in no savings as expenses can overrun. Taking a payday loan (high - interest debt) is not a saving strategy. Paying for wants first may leave little or no money for savings.
• For the second question: Historically, the stock market has provided higher returns than savings accounts (although with higher risk). FDIC insurance protects deposits up to the limit. Banks do pay interest on savings accounts. Checking accounts are highly liquid (easy to access).

Answer:

1. Save a certain percentage of each paycheck and deposit it directly into a savings account
2. Historically, savings accounts earn higher returns than investments in the stock market