Income & Budget Basics
What is income?
Money received from work, benefits, or other sources.
What is the difference between a need and a want?
A need supports basic living, health, or functioning. A want is something desired that may be optional.
What does a bill's frequency tell you?
How often the expense occurs, such as weekly, monthly, quarterly, or annually.
What is interest?
The cost charged for borrowing money.
What are arrears?
Payments that are overdue or unpaid after their due date.
What is a budget designed to show?
Money coming in, planned spending, and money available for savings or other goals.
What tool records purchases so someone can notice spending patterns?
A spending diary or spending tracker.
What two kinds of dates should go on a bill calendar?
Income dates and bill payment or due dates.
What is the difference between a fixed and a variable interest rate?
A fixed rate stays the same during the agreed period. A variable rate can change under the agreement's terms.
What is an insurance premium?
The amount paid to keep an insurance policy active, according to its payment schedule.
A paystub shows $800 gross pay and $150 in deductions. What is the net pay, and which amount belongs in the budget?
$650 net pay. Use the take-home amount of $650.
You spend $6 on takeout coffee four times a week. What is the total over four weeks?
$96: $6 × 4 purchases × 4 weeks.
An annual expense is $240. How much could you set aside monthly over 12 months?
$20 per month.
What does APR stand for, and why compare it when considering credit?
Annual percentage rate. It helps compare the annualized borrowing cost; also check fees, repayment terms, and total repayment.
Before using automatic bill payments, name two things to check.
Payment date, payment amount, available funds, pending transactions, possible fees, or how to monitor and cancel payments.
Monthly income is $1,200. Expenses are $1,075. How much remains, and what happens if an unplanned $150 expense occurs?
$125 remains. The additional expense creates a $25 shortfall unless the plan changes.
A phone may be a need for one person and an optional expense for another. What should you consider before deciding?
How it supports safety, work, health, transportation, or communication, plus available alternatives and costs.
Name two records to keep after paying a bill and explain why they matter.
Receipts, payment confirmations, bank records, or a bill marked with the payment date. They help verify payment and resolve discrepancies.
Option A requires four payments of $35. Option B requires six payments of $25. Which costs less overall, and by how much?
Option A totals $140; Option B totals $150. Option A costs $10 less despite its higher payment.
Your bank statement shows a transaction you do not recognize. What should you do?
Check receipts and transaction details, then promptly contact the bank through a verified number or secure app if it remains unexplained. Keep a record of the contact.
Jordan's $600 paycheck arrives on the 3rd, but $450 rent is due on the 1st. Why can a balanced monthly budget still cause a problem, and what could help?
The money arrives after the bill is due. Set aside rent from the previous month's income; ask whether a due-date change is available.
You want to save $300 in six months. How much must you save each month, and name two steps that could support the goal?
$50 per month. Accept steps such as tracking spending, setting aside money on payday, reducing a flexible expense, or reviewing progress monthly.
A statement starts at $100, adds a $600 deposit, and subtracts $450 rent, $50 phone, $35 groceries, and a $5 fee. What is the ending balance, and why might it not all be available to spend?
$160. Upcoming bills and pending transactions may already require some of that money.
Before signing a borrowing agreement, things to check and one thing to do if the agreement is unclear.
Accept amount borrowed, APR or interest rate, fees, payment amount, due dates, total repayment, missed-payment consequences, or guarantor/collateral responsibilities. Ask for a plain-language explanation or take a copy to review with trusted help before signing.
An overdue utility notice says you owe $70, but you believe you paid. What should you check, and what could you ask if the bill is still unpaid?
Check the account, billing period, amount, deadline, and payment records. Contact the utility through a verified channel. If unpaid, ask about an affordable payment arrangement or assistance and get trusted help if needed.