BUDGETING
What is the goal of budgeting?
To save money
Money you earn from a range of sources
Income
What is financial risk?
The possibility of losing money due to several factors.
Why do we spend money on things we want?
Items create meaning and bring joy to your life.
What are the 2 Credit Scoring Companies?
FICO (Fair Isaac Corporation), VantageScore
How many months worth of your monthly expenses should be in an emergency fund?
6 months
What you have left over after paying your expenses
Savings
When is the best time to start saving?
Does psychology affect a person's ability to decide if something is a want or a need?
Yes
What are the 3 Credit Bureaus?
TransUnion, Equifax, Experian
Name the three components of a budget
Income, Expenses, Savings
Outgoing funds you pay to others
Expenses
Enough to pay for expenses for 3-6 months
Why do we spend so much on needs?
Survival and growth
Don't borrow more than ____ of what you CAN borrow.
30%
Examples such as insurance deductible, critical home or vehicle repairs, family and medical emergencies can be paid using what?
Emergency fund
Compares how much money you earn with how much money you spend or save
Budget
What are long term savings?
Where you hold money for future investments. The foundation for retirement.
What is the first level in Maslow's hierarchy of needs.
Physiological (Food, Water, Shelter)
Americans have the right to a free credit report how many times a year?
1
How often should you review your budget and check your progress?
Monthly
Expense Type: Different each time you pay
Variable
What % of your budget should be dedicated to Needs, Wants, and Savings?
Needs 50%
Wants 30%
Savings 20%
What is the highest and lowest credit score?
High - 850
Low - 300* (sometimes lower)