Income
Name two common sources of income for a teenager
A part-time job and allowance
Define a need
Something required for basic survival.
Define a variable expense
A cost that changes from month to month.
What does the 50/30/20 rule help people manage?
Their budget
Define trade-off.
Giving up one option to choose another
You earn $400 a month. Why can't you buy everything you want?
Income is limited, so choices must be made.
Define a want
Something desired but not necessary
Give one example of a variable expense
Food
In the 50/30/20 rule, what percentage of income goes to needs?
50%
Why do people face trade-offs when budgeting?
Income is limited
A student earns $10 an hour and works 15 hours a week. How much income do they earn per week?
$150
Classify rent as a need or a want .
Need
Why are variable expenses harder to predict?
The cost changes based on usage or choices?
In the 50/30/20 rule, what percentage of income goes to wants?
30%
A student buys school supplies instead of new clothes. What is the new clothes. What is the trade-off?
New clothes
If your income stays the same but prices rise, what happens to your purchasing power?
Purchasing power decreases
A student chooses groceries instead of buying new shoes. Which need is being prioritized?
Food
You spend $120 on food one month and $90 on the next. What type of expense is food?
Variable expense
In the 50/30/20 rule, what percentage of income goes to savings?
20%
If you choose to save money instead of eating out, what are you giving up?
Eating out
Income is money earned from work or other sources, and it is scarce because it is limited.
Why should needs be paid before wants when income is limited ?
Needs are essential for survival
How can reducing variable expenses help a budget?
It frees up money for savings or needs.
If a student earns $1,000 a month, how much should go toward savings using the 50/30/20 rule?
$200
How do trade-offs affect budgeting decisions?
They require prioritizing one choice over another.