BUDGETING
What is a budget?
A plan for how you spend and save money
What is debt?
Money you owe someone.
What is a bank?
A place where people keep and manage money.
What is an asset?
Something that adds value.
What is money?
Money is tool/currency people use to buy their wants and needs.
True or False: A budget helps you avoid spending too much money.
True.
True or False: Debt should always be ignored.
False.
Which bank account would you use to hold money for a long time?
A savings account.
What is a liability?
Something that takes away or loses value.
Name 4 different types of money.
Cash, coins, debit cards, credit cards, checks, or digital money/apps.
What is the Pay Yourself Rule?
Saving some of your money first before spending it or paying your bills.
When you borrow Money and you pay it back, what else do you have to pay?
Interest.
True or False: Banks help keep money safe.
True.
Give 2 examples of an Asset and 2 examples of a Liability.
Liability- Video games, Expensive clothing.
If you have $100 and need to save 20% for investments, how many dollars should you save?
$20
What is the difference between a “need” and a “want”?
A need is something necessary to live; a want is something extra you would like.
What are some types of debt people can have?
Credit cards, loans, car loans, student loans, or money borrowed from someone.
What is the difference between a checking account and a savings account?
Checking is for spending money; savings is for saving money.
What is Net-Worth?
Net-worth is how much money and valuable things you own after subtracting what you owe.
What is the difference between a credit card and a debit card?
A debit card uses your own money from your bank account. A credit card borrows money that must be paid back later.
What is the 50/30/20 Rule?
50% for your Needs, 30% for your Wants and 20$ for your Investments.
John borrowed $400 from Jason. Jason charges John an extra $25 for every $100 he borrows. How much money does John have to pay back in total?
$500 total.
($25 × 4 = $100 extra interest + $400 borrowed = $500)
How do banks help keep your money safe?
Banks are protected by insurance, so your money is safer there than carrying it around or hiding it at home.
What is the formula to find your net worth?
Assets- liabilities = net worth.
What is it called when the cost of living goes up and the value of money goes down?
Inflation