Definitions
What is a spending plan?
When you set money aside for things you want and need
Why is budgeting important?
Helps avoid debt
Name three types of income
Wages, retirement, child support, unemployment, and/or Cash Assistance
I can use CalFresh to buy cigarettes and alcohol.
False
50% of your income should go towards....
personal and familial needs
What is the snowball method?
when you pay the account with the smallest balance first
What is the equation for a spending plan?
total income - total expenses = budget
Is impulse buying healthy?
No
Budgeting gives you control of your money
True
What percentage of income goes towards savings and debt repayment?
20%
What is the avalanche method?
When you pay the highest interest or balance first
What causes anxiety and stress?
Debt
Is a collections account good for your credit?
No, it ruins your credit score.
Fixed expenses change every month
False
30% of your income can go towards...
things you want and desire
What is the envelope system?
Using envelopes to sort your money to pay for items you need or want
How do you prevent overdrafts?
by creating a spending plan
Do I have to report my income
Yes, to determine program eligibility
Rent should take more than 30% of your income
False
The following are considered what?
Disneyland
Cigarettes
Alcohol
wants
Define needs and wants
needs are items that you cannot live without. Wants are items that are necessary to live.
List 3 ways to save money
1. Direct Deposit
2. Money Orders
3. Envelope System
Prioritize the following:
movies
rent
food
clothes
car payment
1. Food
2. Rent
3. Clothes
4. Car payment
5. Movies
Groceries are flexible expenses
True
What are your 3 basic needs?
- Housing
- Food
- Clothing