Budgeting Basics
Spending less than or equal to what you earn is called this.
What is living within your means?
This number tells lenders how risky it is to lend you money.
What is a credit score?
Most student loans don’t require repayment until this happens.
What is graduation or dropping below half-time enrollment?
A basic bank account that earns interest on your money.
What is a savings account?
Groceries and rent are needs, while coffee shops and video games fall under this category.
What are wants?
This budgeting rule divides your income into 50% needs, 30% wants, and 20% savings/debt.
What is the 50/30/20 rule?
Using a secured credit card and doing this consistently can help students build credit.
What is paying your bill on time?
This free federal form determines your eligibility for grants, loans, and work-study.
What is the FAFSA?
A healthy emergency fund should cover this range of living expenses.
What are 3 to 6 months of expenses?
This strategy helps reduce textbook costs significantly for college students.
What is buying used, renting, or using free digital copies?
This type of app, like Mint or YNAB, helps users track their spending habits.
What is a budgeting app?
APR stands for this term, which includes the interest rate and fees charged on a loan.
What is Annual Percentage Rate?
The government pays interest on this type of federal loan while you're in school.
What is a subsidized loan?
This type of interest earns on both your original deposit and the interest it has already earned.
What is compound interest?
This type of purchase often happens suddenly and without planning.
What is an impulse buy?
This financial strategy includes reviewing, adjusting, and allocating every dollar of your income monthly, especially when your income fluctuates.
What is zero-based budgeting?
This misleading debt practice involves making only the minimum payment and accumulating interest over time.
What is credit card debt cycling?
If you do this with a federal student loan, it can lead to wage garnishment and long-term credit damage.
What is default?
This investment account lets you contribute after-tax dollars and withdraw earnings tax-free in retirement.
What is a Roth IRA?
Emotions, social media, or certain environments can trigger this kind of behavior that affects spending.
What is a spending trigger?
This term refers to the trade-off of choosing one financial option over another, such as saving money instead of dining out.
What is an opportunity cost?
These two components of your credit score carry the most weight when determining your overall score.
What are payment history and credit utilization?
This option allows you to pause loan payments due to economic hardship or further education, but interest may still accrue.
What is forbearance?
The major difference between stocks and bonds is that one gives ownership, the other gives this.
What is a loan to a company or government?
These two long-term strategies can help someone stop overspending and stay within a financial plan.
What are tracking expenses and using a cash-only system?