Basic Terms
What are the two main parts of a budget?
Money you make (income) and money you spend (expenses). These help you plan how to save and spend wisely.
Why does budgeting feel good?
It gives you control over your money so you don’t overspend and can save for things you need.
What’s a scholarship?
Free money for school you don’t have to pay back. It’s often given for good grades or achievements.
Who pays taxes?
Anyone earning money in the U.S. Companies and people both pay taxes.
Yao has credit cards with 15% and 23% interest. Which one should he pick?
The 15% one—it’s cheaper because less interest is added to his balance.
What is a grant?
Free money for school you don’t have to pay back. It’s often based on need or merit.
Why is a savings account helpful?
It earns interest, so your money grows over time without you doing anything.
How much should you borrow in student loans?
Only what you need for school and basic living expenses. Borrowing too much means paying back more later.
Why is net pay less than gross pay?
Taxes and other costs like insurance are taken out before you get paid.
Lamar’s rent is $600, but he wants to party. What’s more important?
Rent—it’s a need, while partying is a want.
What’s comparison shopping?
Checking prices at different places to find the best deal before you buy something.
What’s a downside of savings accounts?
You can only take money out a few times a month, so it’s harder to use for daily spending.
Name two big college costs.
Tuition and housing. These are usually the largest expenses.
What’s the most common paycheck deduction?
Taxes. These go to the government for things like roads and schools.
Kendra’s low on cash. Should she use her debit card or gift card?
Gift card—it doesn’t touch her bank account, so her balance stays the same.
What’s the difference between needs and wants?
Needs are things you must have to live, like food and shelter. Wants are things you’d like to have but don’t need, like a new phone.
What’s the best way to stick to a savings goal? (Look for three things)
Make a budget, save a set amount each month, and don’t touch that money.
What’s an alternative to college?
Trade school, military service, or starting a job right away. These options can save money and time.
If gross pay is $2,000 and net pay is $1,308, how much are deductions?
$692. Deductions lower what you actually take home.
What kind of interest rate do you want for a car loan?
A low interest rate, so you pay less extra money over time.
What is a budget?
A plan for how much money you’ll make, save, and spend. It helps you stay in control so you don’t overspend.
What’s one good reason to use a budget?
It helps you avoid overspending and save for things you need.
Why skip college for work?
You start earning money sooner and avoid college costs.
What lowers a checking account today?
Taking cash out of an ATM. This immediately reduces your balance.
Susan’s gross pay is $400, but she only gets $350. Why?
Taxes were taken out for things like Social Security and Medicare.