Budget Basics
What is a budget?
A plan for how you will spend and save your money.
What is an emergency fund for?
To cover unexpected expenses like medical bills or car repairs.
You earn $1,800 a month. Your rent is $900. Is your rent less than, equal to, or more than 50% of your income?
Exactly 50%.
True or False: Only rich people need to budget.
False.
What’s one way to avoid impulse buying?
Make a shopping list and stick to it.
Name one tool you can use to create a budget.
A budgeting app, a spreadsheet, or a simple notebook.
How much is a good starter goal for an emergency fund?
At least $500 to $1,000.
You spend $150 a month on eating out. How much would you save in 6 months if you cut that in half?
$450.
True or False: Saving $5 a week isn’t worth it.
False — small savings add up!
What is “comparison shopping”?
Checking prices at different stores or online to find the best deal.
What’s a common budgeting method where you divide your income into 50% needs, 30% wants, and 20% savings?
The 50/30/20 Rule.
What type of account is usually best for storing an emergency fund?
A high-yield savings account.
You need to buy a laptop for school. What should you do first: (A) Look at your budget, (B) Borrow money without checking, (C) Skip paying rent?
(A) Look at your budget.
If you open a savings account, you can’t touch the money for a year. True or False?
False. Most savings accounts allow withdrawals, but there may be limits.
True or False: If something is on sale, it’s always a good buy.
False.
In budgeting, what is “paying yourself first”?
Saving a set amount of money before spending on anything else.
True or False: Saving small amounts consistently is more important than saving big amounts occasionally.
True.
Your car breaks down and the repair is $700. You have $800 in savings. What’s your smartest move?
Use your savings and work on building it back up.
True or False: Credit cards are "free money."
False. You have to pay it back, often with interest.
You have $50. You want sneakers that cost $80. What's the smart move?
Save up the difference instead of going into debt
True or False: You should update your budget only once a year.
False. You should review and update it regularly, like monthly.
What does "compound interest" mean?
It means you earn interest on both your original money and the interest you've already earned.
You get a $500 tax refund. What's a smart thing to do with it?
Save it, pay down debt, or split it between saving and a small treat.
True or False: You don’t need to worry about savings until you're older.
False.
What’s a “need” vs. a “want”? Give an example of each.
Need = Rent, groceries. Want = Designer shoes, video games.