How to Budget
Name one way to budget. (keep track)
record your expenses, calculate things a head of time
What is the 50 / 30 / 20 rule for budgeting?
Needs / Wants / Savings
What is the minimum amount you should have saved in your savings account? Hint: Its an amount that less than 50% of Americans have in case of an emergency.
$ 1,000
Budgeting gives you________over your money.
control over your money.
When budgeting, you should focus on this first.
debt.
How can you estimate your income for a week, before taxes?
Multiple hours you will work by your rate, consider/subtract taxes taken out
You need to differentiate between these two when you are budgeting ________ and ___________.
wants vs needs.
You need to budget because you want to have enough money for this. (long time)
Ensure you have enough money for life/big expenses
You are interested in renting an apartment after graduating college. You meet with the landlord and complete the application. All of the following may need to be provided when you sign your lease EXCEPT
Proof of employment
A bank account
First and last month's rent
A security deposit
A bank account
Which one of these expenses most likely represents a VARIABLE cost in someone's budget?
Electricity bill - the price of electricity costs will VARY from month to month even though we know the bill is coming.
When you choose something to save for this is called?
A budgeting goal.
When creating a budget you need to be ____ when setting a goal. Its the R in SMART GOALS.
Specific, Measurable, Attainable, Realistic, Time sensitive
Why is it wise to have extra money in your savings?
for emergency expenses.
For two months in a row, Aaron realizes he has a budget deficit of roughly $175. Which of these options makes the most sense for him to fix his problem?
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
Start paying just the minimum monthly payment on his student loan and credit card debt, instead of the extra he's been contributing
Contribute $100 less to savings each month and $75 less to his retirement fund
Sell his current car and get a less expensive vehicle
Cancel one of his streaming video subscriptions and go out to dinner three fewer times each month with friends
Gross is what you make, net is what you take - Jose G.
You need to make sure that you do this weekly or monthly.
balance your checking account
You should always prioritize these two things when you have "extra" money after budgeting. What are they?
Pay off debts, add money to savings
Explain the zero based budgeting system? Why do we use it to budget?
Every dollar has a purpose and our goal is to be balanced at 0$ every month, any extra money we put towards our savings or pay off debts.
Danaisha does all her grocery shopping at organic markets and has a monthly grocery bill of $325. Charles says that Danaisha is wasting her money on wants instead of focusing on needs. He buys in bulk, uses coupons, and shops at Save-More for a monthly bill of $195. Who's budgeting correctly for food?
Both, because needs vs wants are determined on an individual basis
Name one reason why its best to lease a car and one reason why its best to purchase a car.
Buy vs. Lease
You earn a salary of $40,000 per year and decide to save 20% of your gross pay. You set a goal of creating a $16,000 emergency fund. How long will it take for you to achieve your goal?
2 years
You are putting together your first post-graduation budget. Your net pay is $2,500 per month and you estimate that your monthly expenses will be $2,625. What is your deficit?
You have a deficit of $125
You need to budget to stay out of this.
debt.
You overhear your cousin talking about the importance of creating and sticking to a budget. All of the following are good reasons to create and stick to a budget EXCEPT:
A budget can help you identify any bad spending habits
Using a budget can allow you to work towards your financial goals
Having a budget can help you create an emergency fund
Having a budget is a requirement for obtaining a mortgage
Having a budget is a requirement for obtaining a mortgage
Scenario: You receive a monthly salary of $2,000. After deductions, your net pay is $1,600. How would you allocate your income using the 50/30/20 rule?
Using the 50/30/20 rule, your $1,600 net monthly income is allocated as follows: $800 for Needs (50%), $480 for Wants (30%), and $320 for Savings/Debt (20%). This method ensures essential living expenses are met while prioritizing savings and allowing for discretionary