Budgeting
What is a budget?
a plan for how you spend and save your money
Why is it important to save?
To prepare for emergencies and/or achieve future goals
what is impulse spending?
buying something without planning for it
What is investing?
Putting money into something to grow its value
food
A need
50/30/20
50% needs, 30% wants, 20% savings
What is an emergency fund?
Money set aside for unexpected expenses like car repairs or medical bills
what does "living within your means" mean?
What is a stock?
a share of ownership in a company
is a toy a need or a want?
A want
what is the first step in creating a budget?
Tracking your income and expenses
what is compound interest?
earning interest on your savings and the subsequent interest it earns - interest on interest
how can you track your spending?
using a budgeting app, writing it down or checking your statements
why is it important to start saving early?
it gives your money more time to grow through compounding
Why is it important to spend on needs first?
Because you need them to live
What happens if you spend more than your budget?
You will go into debt and have financial stress
How much should you save for emergencies?
3-6 months of living expenses
what is the difference between a need and a want?
A need is essential for survival, while a want is something nice to have but not necessary
What is risk?
the chance you could lose your money
Give an example of a need
food, water, clothing
budgeting tools
budgeting app, spreadsheet, pen and paper
What is a savings goal?
A specific amount of money you plan to save for a purpose
What does it mean to prioritize your spending?
Spending money on what is most important first
before investing
learn about what you are investing your money into
A video game
A want