BUDGETING BASICS
What is the first step in creating a budget?
What is tracking or listing your income and expenses?
What three-digit number ranges from 300-850 and affects your ability to borrow money?
What is a credit score?
What is the recommended amount to have in an emergency fund?
What is 3-6 months of living expenses?
You get a $500 bonus at work. What should you do with it?
What is: Put it toward your emergency fund or savings first, then use the rest for something you want?
Name one example of a short-term financial goal.
What is saving for a vacation, buying a phone, or paying off a small debt? (Usually less than 1 year)
If you make $2,000 per month and spend $1,200 on needs, how much should you spend on wants according to the 50/30/20 rule?
What is $600?
True or False: Paying your bills late has no impact on your credit score.
What is False? (Late payments significantly hurt your credit score.)
You save $50 per month. How much will you have saved in one year?
What is $600?
True or False: It's a good idea to buy expensive items on a credit card if you can pay it off immediately.
What is True? (You build credit and earn rewards without paying interest.)
You want to buy a car for $15,000 in 2 years. How much should you save per month?
What is approximately $625/month? ($15,000 ÷ 24 months ≈ $625)
Name three categories that would fall under "needs" in a budget.
What are housing, food, transportation, utilities, insurance, or healthcare?
Name one example of "good debt" and explain why it's considered good.
What is a student loan, mortgage, or car loan? (They help you invest in your future and build credit responsibly.)
What's the name of the investment strategy where you invest a fixed amount regularly, regardless of market changes?
What is dollar-cost averaging?
Your friend wants to borrow $200 and promises to pay you back next month. What should you consider before lending?
What is: Can you afford to lose this money? Will lending damage your friendship? Is it in writing? Can they actually pay it back?
What's the SMART method for setting financial goals?
What is Specific, Measurable, Achievable, Relevant, and Time-bound?
You have $500 left over after all your bills. Should you spend it or save it? Explain why.
What is save it? (Building an emergency fund protects you from unexpected expenses.)
You have a $5,000 credit card balance with a 20% annual interest rate. Approximately how much interest will you pay in one year if you make no payments?
What is $1,000? (5,000 × 0.20 = $1,000)
Explain the concept of "compound interest" in one sentence.
What is earning interest on your interest, which helps your money grow faster over time?
You're offered two jobs: Job A pays $35,000/year with no benefits. Job B pays $30,000/year with health insurance and a 401(k) match. Which is actually worth more and why?
What is Job B? (Benefits have real monetary value and the 401(k) match is free retirement money.)
You're torn between buying a new gaming console now or saving for college. How should you prioritize?
What is prioritize college? (Long-term goals that impact your future usually outweigh short-term wants.)
What's the name of the budgeting method that allocates 50% to needs, 30% to wants, and 20% to savings/debt?
What is the 50/30/20 rule?
What's the difference between a credit card and a debit card?
What is: A credit card borrows money you must pay back, while a debit card uses money already in your account?
You have $10,000 to save. Would you put it all in a regular savings account or split it between savings and investments? Why?
What is split it? (Diversification reduces risk and savings accounts earn low interest, while investments offer growth potential.)
Describe one action you can take TODAY to improve your financial future.
What is: Create a budget, open a savings account, check your credit score, start an emergency fund, or research investment options?
Create a realistic 5-year financial goal and explain one action step to achieve it
Any reasonable goal with a concrete action step