• A true emergency: Something that's unexpected, necessary, and urgent. All three. A sale on shoes is none of them.

1. A true emergency is unexpected, necessary, and urgent.
2. Start with a starter goal, then build toward 3–6 months of essential expenses.
3. Keep it safe and reachable — a savings account, not stocks.
4. Plan for predictable costs separately.
5. Refill the fund after you use it.

1. 1. D. A surprise $400 car repair you need to get to workIt's unexpected, necessary, and urgent. Holiday gifts are predictable (plan for them separately), and the others are wants.
2. 2. B. $4,500$1,500 × 3 months = $4,500. Use essential expenses only — not wants.
3. 3. FalseStocks can fall at any time — including right when you need the money. Emergency funds belong somewhere safe and easy to reach, like a savings account.

1. 1. $1,600 × 3 = $4,800 and $1,600 × 6 = $9,600.
2. 2. ($1,000 − $250) ÷ $75 = 10 months.

Answers will vary. Look for reasoning that uses the lesson's key ideas:

• A true emergency is unexpected, necessary, and urgent.
• Start with a starter goal, then build toward 3–6 months of essential expenses.
• Keep it safe and reachable — a savings account, not stocks.
• Plan for predictable costs separately.
• Refill the fund after you use it.