Budgeting Basics
What is disposable income?
Money left after taxes and required and required deductions
Describe the difference between credit and debit?
Credit is borrowed money from a lender and debit is money directly from your bank account that you own.
What is an emergency fund used for?
Unexpected expenses
What is the name for owning a small piece of a company?
A stock or a share
You notice you are paying for three streaming subscriptions you rarely use. What is a smart money move?
Cancel unnecessary subscriptions.
What is a monthly expense that stays relatively the same, like rent?
Fixed expense
What is a credit limit?
The maximum amount you can borrow on a credit card.
Why should you keep emergency savings separate from everyday spending money?
To avoid spending money meant for unexpected expenses.
Why is starting to invest early beneficial?
It gives your investments more time to grow through compound returns.
You spend $5 every day on snacks between classes. How much is that in 30 days?
$150
What should you do if your monthly expenses are greater than your income?
Reduce unnecessary spending, prioritize essential expenses, and find ways to increase your income so you can live within your means.
The cost of borrowing money when you carry a balance.
What does HYSA stand for?
High-Yield savings account
What does ROI stand for?
Return on Investment
You receive a $1,000 FASFA refund. What is a smart way to use the money?
Build emergency savings, pay down debt, or put it toward a financial goal.
What is the difference between a budget surplus and a budget deficit?
A surplus means you have money left over; a deficit means expenses exceed income.
If your credit limit is $1,000 and your balance is $300, what is your credit utilization percentage?
30%
Why is it important to compare interest rates when choosing a savings account?
Higher rates can help your money grow faster.
What does it mean to diversify your stock investments?
Investing in stocks in different companies or industries to reduce risk.
Everyone wants to split an Airbnb equally, but one person invites three extra people. Should everyone automatically pay the same amount? Explain why
No. Discuss a fair split based on the number of people staying
What is opportunity cost when making a financial decision?
What you give up when choosing one option over another
What are three things you can do to improve your credit score?
Pay bills on time, keep credit utilization low, and limit unnecessary credit applications.
If you save $50 every week for one year, how much will you have saved without interest?
$2,600
Why is investing considered riskier than saving money in a regular savings account?
Investment can lose value
You spent $25 on DoorDash, but the food would've cost $10 if you picked it up. What did you pay extra for?
Delivery fees, service fees, tips, and convenience.