Budgeting
What are discretionary expenses?
Things you want but don’t need, like snacks, games, or subscriptions.
What is income?
Money you earn or receive.
What’s the main difference between a debit card and a credit card?
A debit card uses your own money; a credit card uses the bank’s money.
What is a bank account?
A place where you can safely store your money and take it out when needed.
Why is it important to set aside money for savings before spending on wants?
So you’re prepared for emergencies and future goals.
How many paychecks do people usually get in a year if they’re paid every two weeks?
26 paychecks
What happens if you don’t pay back your credit card bill on time?
You get charged interest, which means you owe even more money.
What’s the difference between a checking account and a savings account?
A checking account is for everyday spending; a savings account is for saving money and earns interest.
What’s the first thing you should spend your money on when budgeting?
Fixed expenses like rent, groceries, and bills.
What’s the difference between a wage and a salary?
Wage is hourly pay; salary is a fixed yearly amount.
Why do some people use credit cards more often than cash or debit cards?
Because they can buy now and pay later, and sometimes earn rewards.
Why is a savings account a good place to keep extra money?
It’s safe, earns interest, and helps you save for future goals.
What does it mean to make a budget?
A budget is a plan for how to use your money wisely.
How many hours do people usually work in a week?
40 hours
What is a credit score, and why is it important?
It’s a number that shows how good you are at paying back money. A high score helps you borrow money more easily.
How is your money protected in a bank account?
It’s insured by the FDIC up to $250,000, so it’s 100% safe.
If your fixed expenses are $4,200 and you earn $6,000, how much is left for savings and investing?
$1,800
If you earn $6,000 and spend 30% on needs, how much do you have left?
$4,200 is left
If someone misses payments or spends too much on their credit card, what happens to their credit score?
It goes down, making it harder to borrow money in the future.
What do you need to bring to open a bank account? (List all 4 requirments)
A photo ID, Social Security number, money to deposit, and a parent or guardian if you’re under 18.