Income
Define income in personal financ.
What is money a person earns from working, jobs, or other sources.
What is a need ?
What is something required for basic living, like food or housing.
What is a fixed expense?
What is a cost that stays the same each month
In the 50/30/20 rule, what does the 50% represent?
What is needs ?
What is a trade-off in budgeting?
What is giving up one option to afford another?
Why is income considered a scarce resource?
What is because it is limited and cannot cover all wants at the same time.
What is a want?
What is something desired but not necessary for survival
What is a variable expense?
What is a cost that changes from month to month.
In the 50/30/20 rule, what does the 20% represent?
What is savings ?
What is opportunity cost ?
What is the value of the next best choice you give up ?
A student earns $300 a month and has $450 in expenses. What must they do first?
What is allocate income by prioritizing expenses and cutting costs.
Classify groceries and video games as needs or wants.
What is groceries are a need; video games are a want.
Classify rent and entertainment as fixed or variable expenses.
What is rent is fixed; entertainment is variable.
If monthly income is $1,000, how much should go to needs?
What is $500 ?
You spend money on shoes instead of saving. What is the opportunity cost?
What is the saving you gave up .
You earn $200 this month. Rent and food cost $180. What does this show about income and budgeting ?
What is income limits choices, so money must be carefully allocated.
You have $50. You need gas to get to school and want concert tickets. What should be prioritized?
What is gas, because it is need.
Why should fixed expenses be planned first in a budget?
What is because they must be paid and do not easily change.
If you earn $800 a month, how much should be saved using the 50/30/20 rule?
What is $160?
With limited income, which should be prioritized first: rent or entertainment? Why?
What is rent, because it is a need and fixed expense ?
If income decreases but expenses stay the same, what budgeting change is needed?
What is reduce spending or re-prioritize expenses.
How can confusing wants for needs cause budget problems?
What is it can lead to overspending and not covering essential expenses.
Your income drops, but rent stays the same. Which expense type causes the biggest problem?
What is fixed expenses.
Why does the 50/30/20 rule support responsible budgeting?
What is it balances needs, wants, and saving ?
If you choose to save money instead of eating out, what trade-off are you making?
What is giving up eating out to increase savings ?