Budgeting Basics
What is a budget?
a type of loan provided by the U.S. government to help students pay for their education. These loans typically come with various benefits and protections that private loans may not offer.
What is a federal student loan
financial tool that allows individuals to borrow money up to a certain limit to make purchases or withdraw cash. It’s essentially a line of credit provided by a bank or financial institution
What is a credit card
a savings account set aside specifically to cover unexpected expenses or financial emergencies. This fund acts as a financial safety net, helping individuals and families manage unforeseen events without resorting to debt.
What is an emergency fund
Money received, especially on a regular basis
What is Income?
What is the purpose of a student budget?
Financial Awareness
Expense Tracking
Goal Setting
Preventing Debt
Resource Allocation-enables students to allocate funds to necessities (like rent and groceries) while allowing for discretionary spending on leisure or social activities.
Stress Reduction
a type of student loan available to eligible undergraduate students who demonstrate financial need. The key feature of loan is that the federal government pays the interest on the loan while the borrower is in school at least half-time, during the grace period (the six months after graduation), and during any periods of deferment.
What is Subsidized Loan
a measure that represents the annual cost of borrowing money on a loan or credit card, expressed as a percentage. It includes not only the interest rate but also any associated fees or costs over the loan’s term, giving borrowers a clearer picture of the total cost of borrowing
What is APR, or Annual Percentage Rate
How much should you aim to save in an emergency fund
The general recommendation for an emergency fund is to save three to six months’ worth of living expenses. However, the exact amount can vary based on individual circumstances
Money spent on goods and services.
What is Expenses?
refers to spending that is not essential for basic living needs. These expenses are often considered non-essential and can be adjusted or eliminated without impacting one’s ability to meet basic needs like food, shelter, and utilities.
ex. dining out, luxury items, hobbies, entertainment
What is a discretionary expense?
a type of student loan available to both undergraduate and graduate students. Unlike subsidized loans, eligibility for this loan is not based on financial need.
What is Unsubsidized Loan
maximum amount of credit that a lender allows a borrower to access on a credit card or line of credit. It represents the total balance that the borrower can carry at any given time without incurring penalties or fees for exceeding the limit.
What is a credit limit
a type of savings account that offers a significantly higher interest rate compared to traditional savings accounts. This makes it an attractive option for individuals looking to grow their savings while still maintaining easy access to their funds
What is a high-yield savings account?
Money owed to others.
What is Debt?
occurs when an individual's or organization's income exceeds its expenses over a specific period. This means that after accounting for all incoming funds (like wages, investment income, or other revenue) and outgoing funds (such as bills, rent, and discretionary spending), there is leftover money.
What is cash flow surplus?
a temporary postponement of loan payments, allowing borrowers to pause their monthly payments for a specific period. During this time, the borrower is not required to make payments, and in some cases, interest may not accrue
What is loan deferment
Credit Score Damage, increased interest charges, fees, reduced credit availability, potential for debt cycle, impact on loan app
What is potential consequences of maxing out a credit card
The 50/30/20 rule is a budgeting guideline that helps individuals allocate their income in a balanced and manageable way. It divides after-tax income into three main categories Needs/Wants/Savings
What is the 50/30/20 rule?
The total amount of money being transferred in and out.
What is Cash Flow?
How can using a budgeting app help you?
Organization
Real-Time Tracking
Customizable Budgets
Goal Setting
Expense Categorization
Reminders and Alerts
the process of paying back borrowed money, typically in regular installments over a specified period.
What is loan repayment
How can you stay out of debt?
What is Pay your Bills!
a type of deposit account offered by banks and credit unions that allows individuals to safely store their money while earning interest.
Money left after all expenses are paid.
What is Disposable Income?