Budget Basics
This type of expense stays the same every month.
What is a fixed expense?
This is the percentage your money earns in a savings account.
What is interest?
This number represents your trustworthiness as a borrower.
What is a credit score?
The amount of money you take home after taxes.
What is net income?
You want to buy a $20 item but only have $10. The best budgeting option is to do this.
What is save up or wait until you have enough?
The 50/30/20 rule says 50% of your money goes to this.
What are needs?
A fund made up of many stocks or bonds, diversifying risk.
What is a mutual fund?
Money you owe on your credit card.
What is credit card debt?
A mandatory deduction from your paycheck that funds retirement benefits for citizens.
What is Social Security?
You get a job and need to decide how much to save from each paycheck. A good starting point is this percentage.
What is 20%?
The first step in building a budget is tracking this.
What is your income and spending?
Money set aside for emergencies should ideally cover this many months of expenses.
What are 3–6 months?
Paying only this on your credit card will cause debt to grow quickly.
What is the minimum payment?
Insurance that helps pay for medical expenses.
What is health insurance?
Your car breaks down and the repair is $600. You should use money from this fund.
What is an emergency fund?
Cutting unnecessary purchases helps you avoid this common budgeting mistake.
What is overspending?
Investing early helps your money grow over time due to this effect.
What is compound interest?
This type of loan is used specifically for education.
What is a student loan?
This type of expense can fluctuate monthly, like groceries or gas.
What is a variable expense?
You want to track every dollar you spend using technology. This tool helps you.
What is a budgeting app? (e.g., Mint, YNAB)
The term for adjusting your budget when your expenses change.
What is budget recalibration or revision?
A retirement account offered by employers in the U.S.
What is a 401(k)?
The cost of borrowing money, shown as a percentage.
What is APR (Annual Percentage Rate)?
The document that shows your earnings, taxes withheld, and hours worked.
What is a pay stub?
You want to save for college, buy a car, and travel. This type of plan helps you organize multiple goals.
What is a financial plan or goal-setting strategy?