Which of the following strategies will help make your savings grow?

• A. Withdrawing money frequently for non-essential purchases
• B. Spending more than you earn each month
• C. Investing in a diversified portfolio of stocks and bonds
• D. Keeping all your money in a non-interest-bearing checking account

Answer: (C)

Verified step by step guidance

1. Understand the concept of savings growth: Savings grow when the money you set aside earns returns or interest over time, rather than being depleted by frequent withdrawals or kept idle.
2. Evaluate the options provided: Analyze each strategy to determine whether it contributes to savings growth or hinders it.
3. Option 1: Withdrawing money frequently for non-essential purchases reduces the amount of savings available and does not contribute to growth.
4. Option 2: Spending more than you earn each month leads to debt accumulation and prevents savings growth.
5. Option 3: Investing in a diversified portfolio of stocks and bonds allows your savings to earn returns over time, which contributes to growth. Diversification also reduces risk. Option 4: Keeping all your money in a non-interest-bearing checking account does not allow your savings to grow, as it earns no returns or interest.