Budget Basics
This is a plan for how money will be spent and saved.
What is a budget?
To achieve future goals and prepare for unexpected expenses.
Why is it important to save money?
The total amount of money owed to someone or a bank is called this.
What is debt?
This type of loan is used to help pay for college education.
What is a student loan?
This is a special event where friends and family come together to celebrate a birthday or holiday.
What is a party?
Bills that remain the same every month, like rent or subscriptions.
What are fixed expenses?
This type of account earns interest on your savings and is good for emergencies.
What is a savings account?
This number indicates how trustworthy someone is when borrowing money.
What is a credit score?
Borrow money to make purchases, which you must pay back later, usually with high interest rate.
What does a credit card allow you to do?
This is when someone uses their money to buy something enjoyable, like games or movies.
What is entertainment spending?
If you earn $50 a month, and your cell phone bill is $25, what percentage of your income is going toward your phone?
50%.
A goal for saving up for big things, like a car or house, is called this.
What is a long-term savings goal?
What’s the difference between a need and a want?
A need is something you must have to survive, while a want is something that’s nice to have but not necessary.
The additional cost incurred when borrowing money is referred to as this.
What is interest?
This is a fun way to save money by creating a jar for a specific goal, like a new video game.
What is a savings jar?
Costs that can change each month, like snacks or outings with friends.
What are variable expenses?
This is a goal for saving up for something smaller, like a concert or new shoes.
What is a short-term savings goal?
This is the report that shows someone's credit history and how they handle debt.
What is a credit report?
If you don’t pay your credit card bill in full each month, what happens?
You are charged interest on the remaining balance.
This is an activity that involves trading or swapping items with friends instead of buying new ones.
What is a swap or trade party?
The first step in making a budget is to do this.
What is tracking income and expenses?
It’s smart to save money for unexpected costs, which is called this.
What is an emergency fund?
This is a legal agreement that allows someone to borrow money from a bank and pay it back with interest over time.
What is a loan?
A number that represents your ability to repay debt, which affects your ability to get loans or credit.
What is a credit score?
This is someone who helps others learn how to save and spend wisely.
What is a financial educator or money coach or financial planner?