# ✅ Checkpoint: Financial Stability and Debt Payoff

By Better Wise



## Quiz

1. You are sizing your emergency fund. Which figure should you multiply by 3 and by 6 to get your target range?
   - Your total monthly essential expenses
   - Your total debt balances
   - Your total monthly spending, essential and optional
   - Your monthly take-home income
2. Your essentials total $2,400 a month and you already have $600 saved. What is your gap to the 3-month target?
   - $7,200
   - $1,800
   - $6,600
   - $13,800
3. Where should your emergency fund cash sit?
   - In your available credit card limit
   - In an index fund so it grows while you wait
   - In a separate, liquid savings account you do not see in your daily app
   - In your daily checking account so it is easy to reach
4. Your emergency fund target is $7,200 and you want to reach it over 24 paychecks. What is the per-paycheck automatic transfer?
   - $600
   - $7,200
   - $300
   - $150
5. In the avalanche method, which debt receives all of your extra money each month?
   - The debt with the highest interest rate
   - The debt with the largest minimum payment
   - The debt with the smallest balance
   - The extra money is split evenly across all debts
6. Which statement about avalanche and snowball is true?
   - Avalanche usually pays less total interest, while snowball usually produces the fastest first win
   - The two methods use completely different mechanics
   - Snowball usually pays less total interest because small balances clear fast
   - Avalanche lets you skip minimum payments on debts you are not targeting
7. In both avalanche and snowball, when a debt is cleared its old payment is ____ into the next target debt instead of going back into your spending.
8. Build your own one-page plan with two parts: (1) an emergency fund target and per-paycheck transfer, and (2) a debt payoff order and first two months of a schedule. Then rate your work against the rubric.


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## Contents

Part of [💰 Personal Finance: From Spending Spiral to Financial Freedom](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom.md)

- **🧾 Track, Understand, and Direct Your Spending**
  - [📝 Track Spending and Build a Budget That Sticks](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/track-spending-and-build-a-budget.md)
  - [🧠 Consumer Psychology and Lifestyle Inflation](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/consumer-psychology-and-lifestyle-inflation.md) (sign-in required)
  - [✅ Checkpoint: Spending Awareness and Budget Control](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/checkpoint-spending-awareness-and-budget-control.md) (sign-in required)
- **🛡️ Build a Safety Net and Eliminate Debt**
  - [🚨 Emergency Fund and Savings Automation](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/emergency-fund-and-savings-automation.md)
  - [⛓️ Debt Payoff: Avalanche vs Snowball](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/debt-payoff-avalanche-vs-snowball.md)
  - [✅ Checkpoint: Financial Stability and Debt Payoff](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/checkpoint-financial-stability-and-debt-payoff.md) — this lesson
- **📈 Invest for the Long Term and Reach Financial Independence**
  - [🌱 Index Funds and Compound Interest in Practice](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/index-funds-and-compound-interest.md)
  - [🧯 Risk, Insurance Basics, and Protecting Your Plan](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/risk-and-insurance-basics.md)
  - [🧭 The Financial Independence Path: Savings Rate and Milestones](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/financial-independence-savings-rate-and-milestones.md) (premium content)
  - [✅ Checkpoint: Investing and Independence Readiness](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/checkpoint-investing-and-independence-readiness.md) (premium content)
- [Course cheatsheet](https://everwise.study/courses/personal-finance-from-spending-spiral-to-financial-freedom/cheatsheet.md) (premium content)