Budgeting Basics
How often should you create a budget?
Monthly
What are the Four Walls?
Food, utilities, shelter, transportation
What kind of money counts as income?
All money received, including jobs and gifts
What should you do if you overspend in one category?
Adjust by reducing spending elsewhere
What is the purpose of a zero-based budget?
To allocate all income so that income minus expenses equals zero
Why are the Four Walls important?
They cover essential needs before any discretionary spending
What is an example of a fixed expense?
Rent, insurance, car payment
What is the best way to budget?
Whatever works best for you
What does a budget show you?
How much money you plan to come in and go out during the month
Give an example of a necessary vs. discretionary expense
Rent = necessary, eating out = discretionary
What is a variable expense?
Groceries, gas, utilities that change each month
What are two common budgeting mistakes
Not tracking expenses and forgetting irregular cost
What is a common budgeting mistake?
Not tracking expenses or forgetting irregular costs.
What should be covered first when budgeting?
The Four Walls before entertainment or luxuries
What is an intermittent expense?
An occasional large expense, like car repairs or tuition payments
How can an emergency fund help?
It prevents debt by covering unexpected expenses
Why is budgeting important?
It gives control over money and helps plan for financial success
True or False: A cell phone bill is part of the Four Walls.
False
What is irregular income?
Income that changes month to month, like freelancing or commissions.
What is the difference between gross income and net income
Gross is before taxes, net is take-home pay