Budgeting
Something you spend money on regularly and reliably.
What is a bill
This term describes the money you spend on nonessential things, such as entertainment, eating out, and hobbies.
What are wants or discretionary expenses?
This is the process of putting money into assets such as stocks, bonds, or funds with the expectation of growing your wealth over time.
What is investing?
This is money set aside to cover unexpected expenses, such as car repairs, medical bills, or emergency travel.
What is an emergency fund?
This three-digit number helps lenders determine how likely you are to repay borrowed money.
What is a credit score?
This popular budgeting rule divides your after-tax income into 50% needs, 30% wants, and 20% savings and debt repayment.
What is the 50/30/20 rule?
Before purchasing an expensive item, this strategy encourages you to wait 24–48 hours to avoid making an impulsive purchase.
What is the 24–48-hour rule?
This type of investment account allows eligible individuals to contribute after-tax money and potentially withdraw qualified earnings tax-free in retirement.
What is a Roth IRA?
Income - costs = ?
What is cashflow?
This is the best practice for avoiding interest charges on most credit card purchases: paying your entire statement balance by this deadline.
What is paying the full statement balance by the due date?
Unlike traditional budgeting, this strategy requires you to assign every dollar of your income a specific job until your income minus expenses equals zero.
What is zero-based budgeting?
A student buys a $6 coffee every weekday. Approximately how much are they spending on coffee over a 30-day month?
What is approximately $132?
Actively putting money into the stock market with the intent to not hold onto your stocks and instead sell them at a more profitable time.
What is trading?
This type of savings account typically offers a higher interest rate than a traditional savings account while keeping your money relatively accessible.
What is a high-yield savings account (HYSA)?
This percentage represents how much of your available credit you are currently using. Keeping it relatively low can help your credit score.
What is credit utilization?
This budgeting strategy requires you to categorize your expenses and physically or digitally limit spending to the amount allocated in each category.
What is the envelope budgeting system?
It is recommended to upfront in full if possible to avoid an increase in end costs do to this factor.
What is interest?
This financial concept describes how your investment earnings begin generating their own earnings over time.
What is compound interest?
Financial experts commonly recommend having this many months of essential living expenses saved in an emergency fund.
What is three to six months of essential living expenses?
A student borrows $5,000 at a 10% annual interest rate. Approximately how much interest would accumulate over one year at a simple annual interest rate, assuming no payments?
What is $500 in interest?
Your monthly income is $2,000, but your planned expenses total $2,300. What budgeting principle should you apply to fix this problem?
What is reducing or adjusting expenses until they match income?
A pair of off brand running shoes costs 90$. A pair of brand name running shoes costs 140$. The off brand shoes are noted to only be 1/2 as durable as the name brand shoes. This two shoes represent a certain dichotomy.
What is Quantity vs Quality?
This investment fund allows you to purchase a small piece of hundreds or thousands of companies at once, helping spread out investment risk.
What is an index fund?
A savings account offers 4% APY. If you deposit $1,000 and leave it there for one year without additional deposits or withdrawals, approximately how much interest will you earn?
What is approximately $40?
This payment strategy is known for paying off smaller loans/debt first, and applying money from paid off debts to bigger loans/debts
What is the snow-ball method?