Budgeting Basics
This is a plan that tracks your income and expenses.
What is a budget?
This type of fund is designed to cover unexpected expenses.
What is an emergency fund?
Owning one of these means you own a piece of a company.
What is a stock?
This number represents your creditworthiness.
What is a credit score?
This term refers to income after taxes and deductions.
What is net income?
Housing, food and transportation are examples of this in a budget.
What are budget categories?
Financial advisors recommend having this many months of expenses saved.
What is 3 to 6 months?
This investing strategy involves spreading out investments to reduce risk.
What is diversification?
Payment history and credit utilization are examples of these credit score factors.
What are factors affecting credit score?
This economic term describes the general rise in prices over time.
What is inflation?
Financial advisors often recommend saving this percentage of your income.
What is 20%?
This type of savings account offers higher interest than traditional ones.
What is a high-yield savings account?
This term describes earning interest on both the principal and previously earned interest.
What is compound interest?
To maintain a good credit score, it's recommended to keep this ratio under 30%.
What is the credit utilization ration?
This is the cost of borrowing money.
What is interest?
This popular budgeting rule allocates 50% for needs, 30% for wants, and 20% for savings.
What is the 50/30/20 rule?
Saving $50 weekly for a year results in this amount.
What is $2,600?
A 401(k) is offered by employers, while this type of account is individually opened.
What is an IRA?
Loans that require collateral are called this, unlike unsecured loans.
What are secured loans?
This term describes how easily an asset can be converted to cash.
What is liquidity?
If you earn $3,000 a month and spend $2,400, this is how much you save.
What is $600?
This is the key difference between saving and investing.
What is saving for short term goals and safety, investing is for long-term growth with risk?
Investing $1,000 at 5% interest compounded annually for two years yields this amount.
What is $1,102.50?
With a $600 balance on a $2,000 credit limit, this is your credit utilization rate.
What is 30%?
Assets put money in your pocket, while these take it out.
What are liabilities?