Budgeting
A budget is a plan for managing your ___ each month.
money/income
Is food a want or a need?
Need
Using money you borrow from the bank is called using ___.
Credit
Saving money means putting money aside instead of ___.
spending it
Rent is an example of this type of cost.
fixed cost
If you make $500 and spend $450, how much is left over?
$50
Is a new iPhone upgrade a want or a need?
True or False: You don’t have to pay back credit card purchases.
False
True or False: An emergency fund is a type of savings.
True
Movie tickets are an example of this type of cost.
Variable cost
This is the biggest expense in most people’s budgets.
housing/rent
Define the difference between a want and a need.
needs are essentials to live, wants are nice-to-have extras
A higher credit score is generally ___ (better or worse).
better
If you save $10 a week, how much will you have in 10 weeks?
$100
Define fixed cost.
a cost that stays the same each month
What’s the rule called that divides money into 50% needs, 30% wants, and 20% savings?
50/30/20 rule
You have $20. You can either buy lunch or a concert ticket. Which is the need?
Lunch
If you don’t pay your credit card bill on time, what happens?
you’re charged interest/fees and hurt your credit score
What’s the term for money growing because of interest?
Compound Interest
Give one example of a variable cost.
food, gas, entertainment, etc.
True or False: A budget only works if you write it down.
False
Give one example of something that could be both a want and a need depending on the situation.
clothing (basic clothes = need, designer clothes = want)
Name one thing that helps build good credit.
paying on time / keeping balances low / not applying for too much credit at once.
How many months of expenses should you try to save in an emergency fund?
3-6 months
Why is it important to know the difference between fixed and variable costs when making a budget?
because fixed costs are predictable, but variable costs can change and affect savings