Budgeting
What is the difference between a need and a want?
A need is something required to live (housing, food); a want is something nice to have but not necessary.
When getting a paycheck what is important to do after paying all your bills?
Save money before spending on other things.
What is a credit score
A number that shows how trustworthy you are with borrowing and repaying money.
What is comparison shopping?
Checking prices and quality at different stores before buying.
What is a paycheck “gross income”
The total pay before taxes and deductions.
What is the 50/30/20 rule?
50% needs, 30% wants, 20% savings/debt repayment.
What is the difference between a checking account and a savings account?
Checking is for daily spending; savings is for storing money with interest.
What’s one way to build good credit?
Pay bills on time, keep credit card balances low, or use credit responsibly.
If a pack of 12 sodas costs $4.80, what is the unit price per can?
$0.40 per can.
What is “net income”?
The money you take home after taxes and deductions.
Why is tracking your spending important?
It helps you stay on budget, avoid debt, and reach financial goals
If you save $50 a month, how much will you have after one year (without interest)?
$600.
If you borrow $1,000 at 10% interest, how much do you owe after one year (without payments)?
$1,100
What is a coupon or discount code used for?
To lower the price of a purchase.
What government form do employers give you each year to file taxes?
A W-2 form
What’s an example of a fixed expense vs. a variable expense?
Fixed = rent, car payment; Variable = groceries, utilities.
Why is an emergency fund important?
It covers unexpected expenses without using credit or loans.
What is the difference between good debt and bad debt?
Good debt can increase value (student loans, mortgage); bad debt is high-interest and doesn’t grow in value (credit card debt).
Why might buying in bulk save money in the long run?
The unit price is usually cheaper.
Name one type of tax that comes out of your paycheck.
Federal income tax, state income tax, Social Security, Medicare.
If your monthly income is $2,000, and rent is $600, what percent of your income goes to rent?
30%
What is compound interest?
Earning interest on both the original money and the interest already earned.
What happens if you only pay the minimum balance on a credit card?
You stay in debt longer and pay more in interest.
What is buyer’s remorse?
Regret after making a purchase, usually from impulse buying.
Why is it important to file taxes every year?
It’s required by law, and you may get a refund or avoid penalties.