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Free response · 3.1 Saving for Future Purchases
Exam-style personal-finance task: read a household's situation and write a recommendation. Suggested time 12–13 minutes.
FRQ 2 — Personal finance (household recommendation)
The Alvarez household earns $4,600 a month after taxes. Their monthly expenses are $4,100, including $600 in credit-card minimum payments. They have $400 in a checking account and $1,500 in a mobile-payment app, and no savings account. Their goals are to build a $5,000 emergency fund within two years and to buy a used car in four years. Both adults get paid every two weeks, and they say their biggest problem is that 'money disappears' between paychecks.
(A) Identify ONE barrier to saving the Alvarez household faces and explain how it affects their ability to save. 1 pt
(B) Recommend how much the household should save each month toward the emergency fund and where they should keep it, using the framework's criteria. 1 pt
(C) Explain ONE program or practice from the framework that would help the household overcome the barrier you identified in part A. 1 pt