Income & Expenses
This is the money you take home after taxes and deductions.
What is net income?
Is Netflix a want or a need?
What is a want?
You should aim to save at least this percentage of your income.
What is 10–20%?
You just got a $250 car repair bill. What's the best way to handle it if you don’t have savings?
What is cut from wants or delay purchases?
What percent of your income should go to needs?
What is 50%?
A payment that stays the same each month, like rent.
What is a fixed expense?
Buying groceries falls under this type of expense.
What is a need/variable expense?
This fund helps you cover unexpected costs without going into debt.
What is an emergency fund?
You have $100 left. Do you buy shoes or save it? What should you consider first?
What is your needs/emergency fund status?
What percent of your income should go to wants?
What is 30%?
These expenses change from month to month.
What are variable expenses?
A car loan is usually this type of expense.
What is a fixed expense?
If you spend $100 on fast food every month, this category it falls under.
What is a want/variable expense?
Your rent went up by $100. What category must you cut to stay within budget?
What are wants?
What percent of your income should go to savings?
What is 20%?
An expense that doesn’t happen regularly, like car repairs.
What is an irregular expense?
Is a phone bill a fixed or variable expense?
What is both (depends on the plan)?
Spending $600 on clothes leaves you with no savings. What’s the opportunity cost?
What is not being able to save for emergencies?
You earn $2,000/month. Your “wants” add up to $1,000. What’s your maximum budget for needs?
You are overspending on wants (over 30%).
If you earn $1,000 a month, how much should go to savings?
What is $200?
This is setting money aside for future use.
What is saving?
True or False: All irregular expenses are emergencies.
What is False?
Name 3 ways you can reduce spending in your monthly budget.
Answers will vary (e.g., cancel subscriptions, eat at home, limit entertainment).
You spent $150 on concert tickets and had to skip a dentist appointment. What concept is this?
What is opportunity cost?
You spend $700 on needs, $250 on wants, and $50 on savings. Which rule are you breaking?
What is the 50/30/20 rule (not enough savings)?