Budget
What is the purpose of a budget?
To track income and expenses so you don’t overspend.
What is a financial goal?
Something you want to achieve with your money.
What is interest?
Extra money you earn (on savings) or owe (on debt).
What does it mean to buy “in bulk”?
Buying large quantities of something at once usually at a lower price per unit.
Give one example of an essential expense.
Examples: rent, groceries, electricity.
If you earn $300 and spend $250, how much could you save?
$50
Give an example of a short-term financial goal.
Example: saving $50 for new shoes.
Is interest something you can earn, owe, or both?
Both — you can earn it on savings and owe it on loans.
Name one item that’s smart to buy in bulk.
Examples: toilet paper, rice, bottled water, snacks.
Why are essentials more important than wants?
Because they are necessary to live, unlike wants.
Why is it important to compare your income and expenses in a budget?
To make sure you’re not spending more than you earn.
Give an example of a long-term financial goal.
Example: saving for college, buying a car or house.
If you save $100 in a bank account and earn 5% interest, how much will you have after one year?
$105.
Why might buying in bulk sometimes not save money?
Items can expire, spoil, or not actually be cheaper.
What is an emergency fund used for?
Money saved for emergencies like job loss, car repairs, hospital visit, etc.
What could happen if someone spends more than their budget allows?
They may go into debt or run out of money.
What is a repayment plan?
A plan for how to pay back money you owe.
What is one difference between saving and investing?
Saving = safe but grows slowly; investing = riskier but can grow faster.
What does impulse buying mean?
Buying something you do not need without planning or thinking about it.
Give an example of when an emergency fund might be helpful.
Example: car breaks down, medical bills, losing a job.
Create a quick budget: You earn $500, spend $200 on rent, $100 on food, $50 on gas, and $50 on fun. How much is left for savings?
$100 left for savings.
How can sticking to a repayment plan improve your credit score?
It shows you can pay on time and manage money responsibly.
Why is investing riskier than saving?
Because investments can lose value, while savings accounts are secure.
Give one strategy to avoid impulse buying while shopping.
Examples: make a shopping list, avoid stores when bored, set a spending limit.
Why should you not spend your emergency fund on wants?
Because it’s meant for emergencies, not extra spending.