Date: Oct 7, 2010 10:15 AM
Author: Valerie Klein
Subject: Re: What the the most common finanical misunderstandings?

I assume you mean personal fiscal stability? I find the notion of a rainy day fund or an emergency savings account to be very helpful, but it is hard for people to wrap their head around: (a) the amount needed for some level of security and (b) what constitutes an emergency. I suspect in the math classroom, playing out some budget models with fixed monthly, quarterly, annual and then random unexpected costs could be a useful way to play with this concept. I also have found this to be an interesting cost of living comparison tool: which might spark an interesting conversation about the necessary size of an emergency fund in various cities/locations (the rule of thumb I have heard is that your emergency fund should be able to cover your expenses for 3 - 6 months, if not more).