Budgeting Basics
What is a budget?
A plan for how to spend and save money based on income and expenses.
What is an example of a fixed expense?
Rent, mortgage payments, utility/phone bill, etc
What is the difference between a need and a want? Give Examples!
Examples of needs are housing, groceries, utilities (such as electricity, gas, and water), and transportation.
Examples of wants are things for personal desire or entertainment (such as clothing, hobbies, eating out, or gym membership).
Name one tool or method you can use to track your budget.
What is an example of a variable expense?
Entertainment, eating out, groceries, etc
What is the difference between a savings account and a checking account?
A savings account is for long-term saving with interest, while a checking account is for daily transactions.
Why is budgeting important?
Budgeting helps you clearly visualize your finances and reach your financial goals.
Why is it important to review your bank statements regularly?
To ensure there are no unauthorized charges, check your spending, and monitor your account balances.
What are some differences between a credit union and a bank?
Credit Unions:
- Are not for profit
- Have membership requirements
- Often have lower fees and higher rates
- Regulated by the NCUA
Any other acceptable answer
What is the 50-30-20 rule in budgeting?
50% for needs, 30% for wants, and 20% for savings or paying off debt.
What should you do if your expenses are higher than your income?
Reevaluate your expenses/budget, and you should either reduce expenses, increase income, or do a combination of both.
What are some benefits to having an account with a financial institution?
How can you start budgeting?
1. Identify our sources of income
2. Track expenses and record needs and wants
3. Determine how much you have leftover to save
4. Pick a budgeting method that works for you
If your monthly net income is $2,500 and your total monthly expenses are $2,400, how much money can you put towards savings?
$100
What are payday lenders/check cashers and why are they harmful?
High interest rates, high fees, they take a percentage of your check, prey on vulnerable communities, etc