Budget Basics
What is a budget?
A plan for managing income and expenses.
What is an emergency fund?
Savings for unexpected expenses like medical bills or job loss
What is a credit score?
Anumber that represnts a person's creditworthines
What is an impulse purchase?
A purchase made without prior planning or consideration.
What is a financial goal?
A target for saving, investing, or managing money
Name one fixed and one variable expense?
Fixed: Rent/mortgage
Variable: Groceries/entertainment
How many months' worth of expenses should an emergency fund cover?
3-6 months
Name one way to improve your credit card?
paying bills on time, reducing debt, or keeping credit utilization low
Meal planning, using coupons, or buying in bulk.
Why is it important to check your credit?
To monitor for errors, fraud, and maintain good credit.
What is a zero-based budget?
A budget where every dollar has a purpose, so income minus expenses equals zero.
What does " pay yourself first" mean?
Automatically saving money before paying other expenses.
What is the difference between a credit card and debit card?
A credit card borrows money; a debit card uses money from a checking account.
What is a frugal alternative to dining out?
Cooking meals at home or meal prepping.
What is a sinking fund?
Money is set aside for specific future expenses, like vacations or car repairs.
What percentage of your income should go to needs, wants, and savings according to the 50/30/20 rule?
50% needs
30% wants
20% saving & debit payments
What is compound interest?
Interest earned on both the initial deposit and previous interest earned.
What is the debt snowball method?
Paying off the smallest debts first to bind momentum
How can cashback or rewards programs help you save money?
They offer discounts or money back on purchases
What is the benefit of automatic bill payments?
Prevents late fees and ensures timely payments
What is the purpose of tracking expenses?
To see where money goes, identify wasteful spending, and stay within a budget.
What is a 401 (k) or IRA?
Retirement savings account that allows tax-advantaged investments.
What is the debt avalanche method?
Paying off debts with the highest interest rate first to save money.
What is one way to avoid overspending?
Setting a budget, using cash, or making a shopping list.
What is net worth?
assets minus liabilities
( what you own minus what you owe)