Budget Basics
What is a budget?
A plan for how you will spend and save your money.
What does it mean to save money?
Setting aside money instead of spending it immediately.
What is the difference between a need and a want?
A need is something essential, like food; a want is something optional like a new video game.
What is income?
Money you receive from sources such as a job, allowance, or business.
What is a bank account used for?
To securely hold money and help you manage deposits, spending, and saving.
If you earn $200 a month and spend $150 , how much money do you have left?
$50
You save $10 every week for 10 weeks. How much will you have?
$100
You save $25 each week. About how much will you save in 12 weeks?
$300
What is a debit card generally used for?
Paying money from your checking account.
What is a financial goal?
A target you set for your money, such as saving for a car or college.
What are the three main parts of a simple budget?
Income, expenses, and savings
What is an emergency fund?
Money set aside for unexpected expenses, such as a car repair or hospital bill.
What is impulse buying?
Buying something suddenly without planning or thinking it through.
What does interest mean when a savings account pays you interest?
Money the bank pays you for keeping money in the account.
Why should you compare prices before buying something?
To find better value and avoid spending more than necessary.
You earn $500 monthly. Your expenses are $180 for food, $120 for transportation, and $100 for other wants. How much is left?
$100
You want a $240 pair of shoes in 3 months. How much should you save each month?
$80
What does it mean to prioritize your needs over your wants?
Pay for essential things before spending money on nonessential items.
What is the 50/30/20 budgeting rule?
A budgeting guideline that allocates 50% to needs, 30% to wants, and 20% to saving and debt payments.
What is an example of a short term savings goal for a highschool student?
Saving for a concert ticket, school trip, or a new pair of shoes.
What is the envelope method? (Cash stuffing)
A method of budgeting; involves withdrawing physical cash and dividing it into labeled paper packets to ensure you don’t overspend on specific categories.
Say you want to save for college but also want to spend some money with friends. What is a smart way to balance these goals?
Include both savings and entertainment in a budget, prioritize the college goal, and set a reasonable limit for fun spending with your friends
After friend tells you to buy an expensive item because “YOLO”. What is the smartest response?
Make the decision based on your own needs, priorities, and budget rather than peer pressure.
Why can paying only the minimum amount due on a credit card cost you more overtime?
Interest can accumulate on the unpaid balance, increasing the amount you have to pay.
Why is it risky to spend your entire paycheck as soon as you get it?
You may not have enough money for upcoming bills, unexpected expenses, or savings goals.