Budget Basics
**DAILY DOUBLE***
What is a budget?
A written plan for how to spend and save your money.
True or False: Netflix is a “need.”
False — it’s a want.
Define gross income.
The total amount you earn before taxes and deductions.
What is zero-based budgeting?
A plan where every dollar is assigned a job until income minus expenses equals zero.
What’s one reason teens think budgeting is boring?
They think it’s too much work, it limits freedom, or it feels like something only adults do.
Give two benefits of having a budget.
Helps you control spending, reduce stress, reach money goals, save more, avoid debt.
**DAILY DOUBLE***
Give one example of a need and one example of a want.
Need = groceries, rent, transportation. Want = new shoes, eating out, video games.
Define net income.
The amount you take home after taxes and deductions.
Why does Dave Ramsey say, “Give every dollar a job”?
So money is directed with purpose instead of wasted or lost to impulse spending.
What is “paying yourself first”?
Setting aside money for savings/investing before spending on other things.
What is the difference between a fixed expense and a variable expense?
Fixed expenses stay the same each month (ex: rent, car payment). Variable expenses change month to month (ex: groceries, gas).
What percentage of your income is recommended for wants in the 50/30/20 rule?
30
If you earn $2,500 a month before taxes and take home $2,000, what is your net income?
$2,000.
**DAILY DOUBLE***
If you earn $1,800 and your expenses add up to $1,600, what do you do with the extra $200 in a zero-based budget?
Assign it — put it toward savings, debt payoff, or another goal — until the balance equals zero.
How can tracking daily expenses (like coffee or snacks) change your money habits?
It makes you aware of “leaks” and helps you cut back to save more.
What does the “Four Walls” of budgeting mean?
Covering the essentials first — food, shelter/utilities, transportation, and clothing.
**DAILY DOUBLE***
Why is it important to separate needs from wants when budgeting?
To make sure essentials are covered first and avoid overspending on non-essentials.
What are payroll deductions?
Money taken out of your paycheck for taxes and benefits. Examples: Social Security, Medicare,
How does a zero-based budget help stop overspending?
Because every dollar is tracked, you can’t “lose” money or forget where it went.
Give an example of how social media can create pressure to spend money.
Influencers and ads make you want to buy things you don’t need (ex: clothes, trips, gadgets).
Why do many people fail with their first budget attempts?
They expect perfection, don’t track consistently, forget irregular expenses, or give up too soon.
A friend says, “I need Starbucks every morning to function.” How would you explain why that is actually a want?
Needs are required for survival (food, housing, clothing, transportation). Starbucks is a luxury, not a survival necessity.
Why is it dangerous to budget off gross income instead of net income?
Because you’ll overspend — you don’t actually get to keep your gross income; deductions reduce it.
What’s the biggest myth people believe about budgets?
That budgets are restrictive — in reality, they give you more freedom and control.
What’s one money habit you can start now that will pay off in the future?
saving regularly, tracking spending, avoiding debt, investing early, sticking to a budget.