Cogito
Consumer Math · Chapter 2 · Lesson 3
Emergency Funds and Goals
Saving for a purpose, and for a surprise.
12 problems · about 20 minutes · TEKS M.M.2.C
What this lesson teaches
The student plans savings toward a goal and sizes an emergency fund.
- An emergency fund covers three to six months of essential expenses.
- A goal is an amount and a date; divide to get the monthly target.
- Check the target against the budget surplus before committing.
Warm Up
Straightforward practice. Get the method working first.
5 problemsEssentials $1500 a month. Three-month fund in dollars?
Answer 4500
Why $4500.
Why keep an emergency fund in a separate account?
Answer Money in the spending account tends to get spent.
Why Separation makes casual raiding harder.
Essentials $2000 a month. Three-month fund in dollars?
Answer 6000
Why 3 × 2000.
Essentials $2000 a month. Six-month fund in dollars?
Answer 12000
Why 6 × 2000.
Goal $2400 in 12 months. Monthly target in dollars?
Answer 200
Why 2400 ÷ 12.
Build It Up
The same ideas with more to keep track of.
3 problemsGoal $9000 in 30 months. Monthly target in dollars?
Answer 300
Why 9000 ÷ 30.
Saving $250 a month for 8 months. Total in dollars?
Answer 2000
Why 250 × 8.
Should the fund be sized on essential or total spending? 1 essential, 2 total.
Answer 1
Why In an emergency the wants stop.
Stretch Yourself
Mixed problems. Work out what kind of question it is before you start.
4 problemsPut the goal-setting steps in order.
Answer 1. Name the amount and the date. 2. Divide the amount by the months available. 3. Compare that monthly target with the budget surplus. 4. Adjust the amount or the date if it does not fit.
Why The target cannot be checked before it is computed.
Goal $1500 in 5 months. Monthly target in dollars?
Answer 300
Why 1500 ÷ 5.
The Target: Essential expenses $1800 a month. What is a three-month emergency fund, in dollars?
Answer 5400 dollars
Why $5400.
The Timeline: Saving $300 a month toward $5400. How many months?
Answer 18 months
Why 18 months.