Needs vs. Wants
Is rent a need or a want?
Need
What percentage of income should typically go to “needs” in the 50/30/20 rule?
50%
If you work 20 hours per week at $12/hour, what is your weekly income?
240 before taxes
Why should you have an emergency fund?
To cover unexpected expenses
Your car breaks down. Is this a planned or unplanned expense?
Unplanned
Streaming services are a need.
False- Want
What does the 20% in the 50/30/20 rule represent?
Savings & debt repayment
What is the difference between fixed expenses and variable expenses?
Fixed = same every month, variable = changes month to month
How much money should you aim to keep in an emergency fund
3-6 Months
If you get a $100 bonus, what are two good options for what to do with it?
Save it, pay down debt, put into emergency fund, etc.
Give one example of a “want” that might affect your budget.
Clothes, Video games, etc
If you earn $1,000 per month, how much should go to “wants” under the 50/30/20 rule?
30%= $300
Is a phone bill a fixed or variable expense?
Fixed
If your goal is to save $1,200 in a year, how much do you need to save each month?
100
You get sick and miss three days of work. What might happen to your budget?
Less income, harder to cover expenses
Why is it important to separate needs from wants when budgeting?
To prioritize essentials and avoid overspending.
Name two common monthly expenses most people have.
Rent, groceries, phone, utilities, etc.
If your rent is $600 and groceries are $200, how much do you spend on those two expenses?
800
What is the difference between short-term and long-term financial goals?
Short-Term= less than a year
Long-Term= Years
Why is flexibility important in a budget?
Because life changes and unexpected costs come up.
Imagine you only have $50 left this month. You need gas and want to go out with friends. What's the best choice and why?
Gas- a need, transportation is essential.
Why is tracking your spending important for budgeting?
It helps you see where money goes and avoid overspending
Give an example of income besides a paycheck.
May Vary - Allowance, Scholarships, side hustle
Give one example of a short-term goal and one long-term goal.
Short-term: saving for a trip; Long-term: buying a car, college, retirement
Your phone bill increases by $20/month. What are three possible ways to adjust your budget to cover the increase?
Cut a want, increase hours at work, reduce other expenses, etc.