Budget Basics
What is a budget?
This is a plan for how you will spend and/or save your money.
What is a fixed expense?
This is a type of expense that stays the same month to month, usually monthly payments.
If you earn 2000 a month and spend 1800 a month what is your surplus?
200
What is the 50/30/20 rule?
50% goes to need 30% goes to wants and 20% goes to savings
What is an emergency fund?
This is the type of fund to cover unexpected costs like repairs and fixing things.
What is income?
Money you receive, usually from a job or allowance, is considered income.
What is a variable expense?
The type of expenses that can change month to month, like food or entertainment.
What is a deficit?
When you spend more than you are earning
What is a zero based budget?
This type of budget assigns every dollar to a specific category so your income minus expenses will equal out to zero.
What is debt?
Money that you have spent that you didn't earn yet so you borrow and now you have to pay that money back usually with interest.
What is saving?
What is cutting costs or reducing expenses?
Cutting costs that are deemed unnecessary to stay within your budget.
What is a surplus?
When your income is greater than your spending.
What is a budgeting app?
A financial tool that helps you track all spending.
What is a trade off?
Choosing between spending money on wants or saving it for future purposes would be a trade off.
What is gross income?
The total amount of money you earn before taxes are taken out.
What is underestimating expenses?
This budgeting mistake occurs when you forget about irregular costs or underestimate other expenses.
If your income is 3000 and your rent is 900. What is the percent of income you spend on rent?
30%
If your income is 2500 and you are following the 50/30/20 rule how much money should go to needs.
$1250
If your income decreases and you expect to spend the same amount each month still what should you do?
Adjust your budget or update budget
What is net income?
This is the amount of money you take home after tax and other deductions.
What is an irregular or unexpected expense?
An unexpected cost like a repair or something lost.
If your monthly expenses total 1600 and you want a 3-month emergency fund what total amount would you need to reach this?
$4800
What is revising or updating a budget?
Adjusting your budget after changes in income or expenses.
A person wants to save 12000 over the year how much should they save each month?
They would need to save $1000 each month