Budgeting Basics
What is a plan for managing money called?
What is a budget?
What is the difference between a checking and a savings account?
What is a checking account used for everyday transactions, while a savings account is for accumulating funds and earning interest?
What is a credit score?
What is a numerical number that represents a person's creditworthiness?
Why is it important to know the difference between needs and wants when managing money?
You earn $3,000 per month after taxes. Your rent is $1,000, utilities are $200, groceries are $400, and you have a $300 car payment. How much discretionary income (money left over) do you have each month?
What is $1,100?
This is the percentage of your income that financial experts recommend saving.
What is 20%?
Which type of bank account would you use for paying bills online?
What is a checking account?
What is APR stand for in the context of credit cards?
What is an Annual Percentage Rate?
What is an example of a long-term financial goal?
Retirement, down payment for a home, buy a second home, etc.
If you make $200,000 and your effective tax rate is 25%, how much would you pay in taxes?
$50,000
What is the best way to avoid impulse buying when you are going shopping in a store?
What is make a shopping list and stick to them?
Why is it important to save money?
What is to have funds for emergencies or future goals?
What is one consequence of having a low credit score?
What are higher interest rates, difficulty getting loans, or rejection of rental applications?
Give an example of a short-term financial goal.
If you borrow $5,000 at a 10% simple interest rate for 3 years, how much total interest will you pay? (I= Prt)
What is $1500?
What is the monthy bank loan payment on a house called?
What is mortgage?
What does "interest" mean when talking about money and loans?
What is the money charged for borrowing money?
Name one way to improve your credit score.
What is paying bills on time, reducing debt, or checking credit reports for errors?
What is an emergency fund, and why is it important?
What is money set aside for unexpected expenses, providing financial security?
If you buy a new laptop for $1,200 and the sales tax rate is 8%, what is the total amount you will pay?
What is $1296?
When you are creating a budget, what are the amounts called that you are deducting?
What are expenses?
What is the charge called from the bank when a transaction allows your account to "drop below zero" ?
What is an overdraft fee?
What is the difference is simple and compound interest?
compounding interest- interest multiplies over time
simple interest- just flat rate of interest
What is one method of budgeting that we discussed?
What are Apps, paper, journal, etc
You want to follow the 50/30/20 budget rule. If your monthly take-home pay is $4,000, how much should you allocate to needs, wants, and savings/debt repayment, respectively?