Personal Financial Planning
What is a personal budget used for?
To track income and expenses.
What’s the difference between saving and investing?
Saving is for short-term; investing is for long-term growth.
What’s a fixed expense?
A cost that stays the same each month (like rent).
What’s the first step in creating a financial plan?
Setting financial goals.
What is “compound interest”?
Earning interest on both principal and interest.
What’s a variable expense?
Costs that change monthly (like food, gas).
What does “net worth” mean?
Assets minus liabilities.
What’s a 401(k) or IRA used for?
Retirement savings.
What’s a discretionary expense?
Non-essential spending (like entertainment).
Name one benefit of having an emergency fund.
Covers unexpected expenses without debt.
If you save $10 weekly, how much after one year (no interest)?
$520.
Give one way to reduce monthly expenses.
Cook meals, cancel subscriptions, or carpool.
What is the recommended size of an emergency fund?
3–6 months of expenses.
Why start saving early?
More time for compound interest to grow.
What’s a “spending leak”?
Small, frequent purchases that add up (like coffee runs).