Budgeting Basics
What is: a plan for how you will spend and save your money each month?
Budget
50%
A type of credit card that requires a cash deposit up front, which serves as your credit limit.
Secured Credit Card
A bank account designed for daily transaction, where you deposit money, and use a debit card
CHECKING account
Money you owe to a person, bank, or company.
DEBT
Expenses that stay the same price every month, such as rent or a monthly bus pass.
FIXED expenses
Rent, basic food, utilities, and essential transportation fall into this category.
NEEDS, 50%
Name one important habit for building a high credit score.
Pay on time, keep utilization low, keep old accounts open, limit new applications, monitor your credit.
A card connected directly to your checking account that spends money you already have
DEBIT CARD
The minimum amount of money you are required to pay on a bill or credit card each month to keep the account in good standards.
Minimum Payment
Expenses that change from month to month, like groceries, utility bills, or clothing.
VARIABLE expenses
True or False: Streaming services, designer clothes, and takeout meals count as a "needs" because they make life "easier?"
FALSE
What is a three-digit number (ranging 300-850) that shows lenders how responsibly you manage borrowed money
credit score
A fee charged by a bank if you spend more money than you actually have in your account.
The total amount of money you earn BEFORE taxes or deductions are subtracted.
Gross Income
Money you set aside specifically for unexpected life events, like medical bills or car repairs.
Emergency Fund or Savings
Under the 50/30/20 rule, what percentage of your income goes to WANTS, like dining out or entertainment
30%
The extra money you are charged when you carry a balance on credit from month to month.
interest
An account designed to hold money you don't intend to spend right away
SAVINGS account
A detailed document showing your history of borrowing, paying off loans, and managing credit cards.
Credit Report
the total amount of money on your paycheck after taxes and deductions are taken out.
Net Pay
Under the 50/30/20 rule, what percentage of your income should go towards SAVINGS?
20%
True or False: Closing an old credit card always helps raise your credit score?
FALSE
True or False: A Savings Account will earn you interest.
TRUE
LOAN