Budgeting Basics
What is a budget?
A plan for how you earn, spend, and save money
What is credit?
Borrowed money you must repay
What is an emergency fund used for?
Unexpected expenses
What is income tax?
Tax paid on money you earn
What is a scam?
A trick to steal money or information
Which expense usually changes month to month: rent or groceries?
Groceries
What happens if you miss a credit card payment?
Fees, interest, and credit score damage
Which is safer: a savings account or individual stocks?
Savings account
What document shows how much you earned from a job?
W-2
Name one red flag of a scam message.
Urgency, prizes, spelling errors, unknown sender
If you make $1,200 a month and save $240, what percent are you saving?
20%
What does APR stand for?
Annual Percentage Rate
What is compound interest?
Earning interest on interest
What is a tax deduction?
Something that lowers taxable income
Why is “buy now, pay later” risky?
Can lead to debt and fees
Name one way to reduce monthly expenses without earning more money.
Cut subscriptions, cook at home, buy used items.
Which usually has higher interest: credit cards or student loans?
Credit cards
Why do people invest instead of just saving?
To grow money faster over time
Are refunds “free money”? Why or why not?
No, it’s money you overpaid
What should you do before making a big purchase?
Compare prices, read reviews, check budget
Why is “paying yourself first” a smart budgeting strategy?
It ensures savings happens before spending
Name two things that affect your credit score.
Payment history, credit usage, length of credit
What is one benefit of starting to invest early?
More time for compound growth
Why might someone owe money at tax time?
Not enough taxes withheld
Why do influencers sometimes give bad financial advice?
Sponsored content, lack of expertise