Budgeting
What is a budget?
A plan for how you will spend and save your money.
What is a credit score used to help lenders determine?
How risky it may be to lend you money.
Name one expense you might have when you move into your first apartment.
Rent, utilities, groceries, internet, insurance, etc.
What is a scholarship?
Money for education that generally does not have to be repaid.
What is an emergency fund?
Money set aside for unexpected expenses.
You make $2,500 per month after taxes. Your expenses are $2,200. How much do you have left?
$300
True or false: Paying your credit card's minimum payment means you won't pay interest.
False
What are utilities?
Services such as electricity, water, gas, or internet that you pay for.
What is a student loan?
Money borrowed to pay for education that generally must be repaid, usually with interest.
Where should money for an emergency generally be kept: somewhere easily accessible or locked away for decades?
Easily accessible.
Which is usually a need rather than a want: groceries, concert tickets, or a new video game?
Groceries
What happens if you consistently pay your credit card bill late?
It can hurt your credit and may result in late fees/interest.
Your rent is $1,200, but your landlord requires first month's rent plus a $1,200 security deposit. How much do you need upfront?
$2400
True or false: You should borrow as much in student loans as you're offered because you might need it later.
False
What does compound interest mean?
You earn returns on your original money and on accumulated returns.
You keep running out of money before the end of every month. What is one thing you should do first?
Track your spending to see where your money is going.
You have a $1,000 credit card balance with a high interest rate. Why can carrying the balance be expensive?
Interest can cause the amount you owe to grow.
Why is it important to consider more than just rent when deciding if you can afford an apartment?
You also have utilities, food, transportation, insurance, and other expenses.
What is one reason someone might want to apply for FAFSA?
To determine eligibility for federal and potentially other financial aid.
Which generally has more long-term growth potential but also more risk: a savings account or investing in stocks?
Stocks/investing.
You make $3,000/month. Your rent is $1,200, car payment is $400, food is $400, utilities are $200, and entertainment is $300. How much is left?
$500
You have a credit card with a $5,000 limit and a $1,000 balance. What percentage of your available credit are you using?
20%
You get a job in a new city. Your apartment is $1,300/month, but you also estimate $250 utilities, $400 food, $300 transportation, and $150 insurance. What is your estimated monthly cost?
$2,400
You receive $8,000 in financial aid, but your school expenses are only $6,500. Why might you NOT want to automatically spend the extra $1,500?
It may be borrowed money or may need to cover future expenses; borrowing unnecessarily can increase debt.
Why is starting to save for retirement early potentially valuable?
Your money has more time to potentially grow and compound.