Chapter 2 Learning Outcomes

In this chapter, students will…
  • Identify the Five Foundations of personal finance.
  • Understand the purpose of having an emergency fund.
  • Explain the three basic reasons for saving money.
  • Understand the importance of saving for both long-term and short-term goals.
  • Describe what a sinking fund is and identify purchases for which students would use a sinking fund.
  • Demonstrate how compound interest works and understand the impact of annual interest rate.
  • Describe the difference between simple and compound interest.
  • Understand the importance of beginning to save now.

 Chapter 2 Vocabulary

  • Compound interest
  • Emergency fund
  • Interest rate
  • Five Foundations
  • Sinking fund

Academic Standards Met in Chapter 2

Financial Responsibility and Decision Making: Apply reliable information and systematic decision making to personal financial decisions.
  • HS-PF1-1: Take responsibility for personal financial decisions.
  • HS-PF1-4: Make financial decisions by systematically considering alternatives and consequences. 
Income and Careers: Use a career plan to develop personal income potential.
  • HS-PF2-3: Describe factors affecting take-home pay.
Planning and Money Management: Organize personal finances and use a budget to manage cash flow.
  • HS-PF3-1: Develop a plan for spending and saving.
Credit and Debt: Maintain creditworthiness, borrow at favorable terms, and manage debt.
  • HS-PF4-3: Describe ways to avoid or correct debt problems.
Saving and Investing: Implement a diversified investment strategy that is compatible with personal goals.
  • HS-PF6-1: Discuss how saving contributes to financial well-being.
  • HS-PF6-2: Explain how investing builds wealth and helps meet financial goals.

Files for Download

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Chapter 2

Chapter 2 Assignments

2.1 - Savings by Nation
2.2 - Sinking Fund Savings
2.3 - Savings: A Way to Build Wealth
2.4 - Chapter 2 Case Studies
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