BUDGET BASICS
What is a budget?
A plan for how to spend and save money
What is income?
Money you earn
Which is a need: food or video games?
Food
What does saving mean?
Setting money aside
What happens if you spend all your income?
You have no savings
Why do people use budgets?
To manage income, expenses, and savings
What is an expense?
Money you spend
Why should needs be paid before wants?
Needs are required to live
Why do people save money?
For emergencies and future goals
What is one consequence of overspending?
Running out of money
What happens when expenses are higher than income?
You lose money or go into debt
Why is it important to know your income before creating a budget?
Because spending must be planned based on how much money you earn
Why can too many “wants” cause budgeting problems?
They take money away from needs and savings
What is an emergency fund used for?
Unexpected expenses
Why do impulse purchases often hurt budgets?
They are unplanned and reduce available money
Why can someone with a budget still run out of money if they ignore it?
Because a budget only works if spending follows the plan
If your income stays the same but expenses increase, what must change in your budget?
Spending or saving must be adjusted
Why do wants often feel like needs when budgeting is ignored?
Because habits and emotions influence spending
Why is saving small amounts regularly more effective than saving large amounts rarely?
Because consistency builds habits and adds up over time
How can small daily purchases quietly damage a budget over time?
Small costs add up and reduce savings
How can having a budget help prevent financial emergencies before they happen?
By planning savings and avoiding overspending before problems arise
Why can increasing income without controlling expenses still cause financial problems?
Because spending can grow just as fast as income
How can mislabeling wants as needs lead to long-term financial stress?
It causes overspending and reduces savings over time
How can saving first change a person’s spending behavior long-term?
It forces smarter choices with remaining money
Why do financial mistakes usually come from habits rather than single big purchases?
Because repeated behavior has a larger long-term impact