Budgeting Terms
How is gross pay different from net pay?
Gross pay is the total you earned, while net pay has taxes deducted
You are putting together your first post-graduation budget. Your take-home pay will be $2,200 per month. You estimate your monthly costs to be rent of $700, car payment of $300, car insurance of $150, car maintenance of $50, entertainment of $400, food expense of $150, mobile phone of $75, student loan payment of $225 and other expenses of $300. How would you describe your budget after analyzing all of your income and expenses?
Over spending / Deficit of $150
Which budget expense category do you think is largest for most people?
Housing
Mike is a great dog groomer. As his job, he books gigs grooming customers' dogs through social media apps. Who provides Mike's health insurance and retirement plan?
Mike has to fund them himself.
Which location is likely to have the HIGHEST cost of living?
A rural area with a population of 6000 people
A college town located 5 hours from the nearest big city
A city thats crime rate is high and population has decreased in the last 3 decades
A thriving city with a growing health care sector, pro sports teams, and good public transportation
A thriving city with a growing health care sector, pro sports teams, and good public transportation
What is an example of a VARIABLE cost in someone's budget?
Electricity bill, Water bill, any expense that may be higher or lower from one month to the next.
If you are following a 50/30/20 Budget and take home $2000 per pay period, how much are you budgeting for your WANTS?
$2000 * 30%= $600
You're considering moving into a 4-bedroom apartment with 3 roommates rather than living on your own after collage. Which of your expenses would likely DECREASE by having roommates?
Rent, Utilities, Internet bill
Joe is at the grocery store and has three options for buying cereal: 1 box for $2.78, a 3-pack for $6, or a 4-pack for $9. Comparing unit costs, which option is the best deal?
3-pack for $6
6/3=$2
9/4=$2.25
1=$2.78
What will most landlords require at the time you sign the lease in order to get the apartment.
First month's rent and a security deposit
The defining characteristic of a job in the gig economy is...
Workers complete short-term work for many different clients
What do you need to know to create a budget?
Net income, Expenses/needs, and wants
Give a description of a Zero-Based Budget?
You put every dollar of your take-home pay into a budget category each month
You are overspending in your monthly budget, what are some ways to decrease the amount you spend?
A: Stop eating out, spend less on wants,
When renting an apartment, why is it important to have a written lease?
A lease clearly states the apartment costs and expectations for living there
What does "Pay yourself first” mean to you?
Put money into your savings first
Create a 50/30/ 20 budget: Monthly Net / Take Home pay = $2,500
50%=$1250
30%= $750
30%=$500
Why do more people tend to use budgeting apps to help them budget?
Because users carry their phones just about everywhere making budgeting fast and convenient
Which car loan term will save you the most money?
12 months/$350 a month
24 months/$300 a month
36 months/$200 a month
72 months/$150 a month
12 months/$350 a month
If you are trying to substantially reduce the amount you spend on food, what should you do?
Cooking your own food at home for as many meals as possible.
Define Gross Income & Net pay,
Gross Income- sum of all wages, profits, and salaries before deductions or taxes
Net pay- means take home pay or the amount you earn after taxes
Create a zero based budget based on a $4,000 monthly net income. Rent $850, Utilities $350, Phone bill $70, Groceries $150
(Answer may vary)
$4000-$1420=$2,580
Savings=$500 , Spending=$500 , Retirement=$1000 Entertainment=$580
When using the Envelope Budget, how much cash should you take out when you receive your paycheck?
Enough to cover variable expenses or the amount budgeted for each category.
One benefit of buying a USED car is...
One benefit of buying a car vs. leasing is...
Lower acquisition (buying) price
You can build up trade-in or resale value
Why is it particularly important that freelancers have an emergency fund?
Freelancers/ independent contractors don't have guaranteed work every day, so they need an emergency fund in case they go a while between clients.