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.
Debt
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.
Alex earns $150 a month, spends $130, and saves $20. When his bike breaks, he avoids using a credit card because he planned ahead with this.
Emergency Fund
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.
Spending money without considering future needs makes it harder to reach these.
Financial Goals
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.
A student stays within their budget most months but consistently falls short of savings goals because of small, unplanned purchases. Which money habit is most likely causing this problem?
Impulse buying
Melissa wants her money to grow but also stay low-risk. What tool best fits both conditions?
A savings account
A student earns $120 a month. Their budget includes $60 for essentials, $30 for savings, and $40 for fun.
The expenses exceed income / the budget doesn’t balance.
How can sticking to a repayment plan improve your credit score?
It shows you can pay on time and manage money responsibly.
Money earned from chores, jobs, interest, or businesses all fall under this category.
Income
Give one strategy to avoid impulse buying while shopping.
Examples: make a shopping list, avoid stores when bored, set a spending limit.
Paying for emergencies with credit instead of savings most directly increases what?
Debt