Budget Basics
A plan for how to spend and save your money.
What is a budget?
Rent, groceries, and utilities are examples of this.
What are needs?
A place where you should store your emergency savings.
What is a savings account?
A plastic card that lets you borrow money for purchases.
What is a credit card?
A written or digital record of income and expenses.
What is a budget?
The term for money you earn from a job or other sources.
What is income?
A new phone or concert tickets are examples of this.
What are wants?
This fund helps cover unexpected expenses like car repairs or medical bills.
What is an emergency fund?
The fee charged for borrowing money.
What is interest?
A free app or tool used for personal budgeting.
What is Mint, YNAB, or EveryDollar?
This is the term for money you spend.
What is an expense?
This phrase helps you decide if something is a need or want: “Can I live without it?”
What is a budgeting rule of thumb?
Recommended number of months' worth of expenses to save for emergencies.
What is 3 to 6 months?
This 3-digit number reflects your creditworthiness.
What is a credit score?
A budgeting method where every dollar has a job.
What is zero-based budgeting?
Before you create a budget, you need to do this first.
What is tracking your income and expenses?
The 50/30/20 rule recommends spending 30% of your income on this.
What are wants?
The act of setting aside money regularly.
What is saving?
One strategy to pay off debt by starting with the smallest balance.
What is the snowball method?
Reviewing this monthly can help adjust your budget.
What are bank statements or expense reports?
The difference between your income and expenses.
What is your net income or cash flow?
The cost of choosing one option over another.
What is opportunity cost?
The earlier you start saving, the more you benefit from this financial principle.
What is compound interest?
Missing payments can negatively affect this.
What is your credit history or credit score?
Cutting back on this type of spending can help you save money.
What is discretionary spending?