Budget Breakdown
What is the 50/30/20 budgeting rule?
50% needs, 30% wants, 20% savings/debt repayment
Is a laptop for school a need or a want?
Need
What does APR stand for?
Annual Percentage Rate
What’s a security deposit?
A refundable fee paid when renting, used to cover damage
What is principal on a loan?
The original amount borrowed
If you earn $2,000/month, what amount should go to savings under the 50/30/20 rule?
$400
Is Spotify Premium a need or a want?
Want
What’s the minimum payment on a $1,000 balance at 3% minimum payment?
$30
What’s one benefit of renting?
Flexibility, fewer maintenance costs
What is interest?
The cost of borrowing money
Your rent is $800, and you spend $200 on groceries and $100 on transportation. How much is left from a $1,500 income?
$400
You have $100 left for the week. What’s the need?
a) Groceries
b) Concert ticket
a) Groceries
True or False: Paying only the minimum keeps you in debt longer.
True
What’s one benefit of owning a home?
Building equity
You borrow $5,000 at 5% interest for 1 year. What’s the interest?
$250
True or False: Your emergency fund is considered part of your budgeted monthly expenses.
False (It’s savings.)
Are prescription medications a need or want?
Need
What’s one pro of using a credit card responsibly?
Builds credit history
True or False: Homeowners always pay less than renters.
False
What’s a student loan grace period?
Time after school before repayment begins
If you want to save $1,200 in 6 months, how much must you save monthly?
$200
Is a vacation a need or want?
Want
What’s one con of misusing credit cards?
Debt/interest accumulation
What’s a mortgage?
A loan used to buy a home
What’s one federal student loan type?
Direct Subsidized or Unsubsidized Loan