Budgeting and Investing Jeopardy

Budgeting Basics

100

These expenses include housing, groceries, transportation, and health care.

Needs

200

These expenses include electronics, travel, dining out, and streaming.

Wants

300

This simple calculation tells you how much money you have left after your expenses.

Income minus spending

400

Waiting 24 hours before a large purchase is one strategy recommended for this type of spender.

Impulsive spender

500

Holding too much cash and missing investment opportunities are possible problems for this type of spender.

Conservative spender

50/30/20 Rule

100

This percentage of after-tax income goes toward needs.

50%

200

This percentage of after-tax income goes toward wants.

30%

300

This percentage is split between saving and investing.

20%

400

With $10,000 of monthly after-tax income, this amount would go toward wants.

$3,000

500

With $5,000 in monthly after-tax income, this amount would go toward savings under the 50/30/20 rule.

$1,000

Investing Basics

100

Buying one of these gives you partial ownership in a company.

Stock

200

When you buy one of these, you are lending money to a company or government.

Bond

300

Buying only one company's stock exposes you to this type of risk.

Concentration risk

400

Unlike owning a stock, buying a bond makes you this rather than an owner.

Lender

500

This feature of an Exchange-Traded Fund reduces the impact of one company's poor performance.

Diversification

Accounts & Brokerages

100

This type of company acts as the middleman between you and the stock market.

Brokerage

200

Fidelity, Charles Schwab, and Vanguard are examples of these.

Brokerages

300

This account has no early-withdrawal penalty and allows money to be withdrawn at any time.

Taxable account

400

This retirement account involves paying taxes now in exchange for tax-free growth and withdrawals later.

Roth Individual Retirement Account (Roth IRA)

500

These three destinations form the investing order of operations. (order these: 401(k) match, Roth IRA, taxable account)

401(k) match -> Roth IRA -> taxable account

Investing Strategy

100

Of stocks and bonds, this investment is generally considered lower risk.

Bonds

200

This investment bundles small pieces of many companies into one purchase.

Exchange-Traded Fund (ETF)

300

This strategy involves investing a fixed amount of money on a regular schedule.

Dollar-cost averaging

400

After maximizing an employer's 401(k) match, invest in this account next.

Roth IRA

500

This investing method puts the entire available amount into the market immediately rather than gradually.

Lump-sum investing