Budgeting
What are needs vs. wants?
Need=Basic needs
Wants=Things aren't necessary in life
What is credit?
Borrow money and pay it back later.
What is a credit score?
Number calculated that says you pay your bills on time
What is a bond, and how does it generate income?
loan you give to goverment company
What does it mean to rent a home?
Renting a home means you pay money to live in a house or apartment that someone else owns.
What is net income vs. gross income?
Gross Income=Total amount you made
Net income= The amount you actually take home
What is a credit limit?
The max amount of money that a lender can allow you to borrow
List three ways to improve a low credit score?
1. Pay all the bills
2. Reduce credit card balance
3. Avoid opening too many account at once
What is a mutual fund?
A type of investment where money from people is pooled in and managed by a professional
How can roommates help reduce housing costs?
splitting shared expenses
Why is it important to track your expenses?
Avoid overspending
Stay on budget goals
How can budgeting help credit use?
Prevent overspending
Avoids debt buildup
Credit score drop and late fees
What is risk in investing?
Lose money or not earn as much as expected
Why is it important to include utilities in a housing budget?
regular monthly costs that add to the total price of living somewhere.
Why do people struggle to stick to a budget?
Impulse spending
Lack of discipline
Why is a good credit score important in life?
Easier to get loans
Financial trus
Why do lenders care about your credit score?
It shows the lender if the person is reliable or not.
What might happen if you invest all your money in one company?
Very risky, and your money is not spread out diversely
How might location affect both the cost and convenience of housing?
Cost: High-demand areas are usually more expensive
Convenience: Living closer to work, stores, and school
What is an emergency fund, and why is it important?
Money you set aside for unexpected expenses
Prevents debt
Protects your budget
If you have a $1,000 credit limit, should you use all of it? Why or why not?
It can hurt your credit score
Harder to pay off debt
If you pay off all of your debt, Will your credit score automatically become perfect? Why or why not
No it doesn't mean it automatically perfect.
1.they depend on credit and payment history
2.credit Mix
3.Credit activity
How can emotions affect investing decisions?
Fear makes someone makes the personn scared and sell early
overconfident makes a person take bigger risks
How does a mortgage work in simple terms?
A loan from a bank to help someone buy a house, a car, or any other expenses