Budget Basics
What is a budget?
A plan for how you will use your income to pay for expenses, savings and spending.
Is paying rent a need or a want?
Need.
What does "due date" mean on a bill?
The date by which payment is required.
What does it mean to save money?
Keeping money aside rather than spending it.
You check your bank account and notice you only have $20 left. What should you do?
Check upcoming expenses and work out what money is needed before spending it.
If you earn $1,000 and spend $800, how much is left?
$200
Is buying a new video game usually a need or a want?
Want.
Name two household bills someone living independently might have.
Examples: electricity, water, internet, phone, gas.
Name one reason someone might save money.
Emergency expenses, holiday, large purchase, future goal, etc
You receive a bill that you don't recognise. What should you do?
Don't automatically pay it; check who sent it, what it relates to and seek clarification if needed.
What is the difference between income and expenses?
Income is money coming in; expenses are money going out
Is groceries a need or a want?
Generally a need, although some food choices are wants.
What is a direct debit?
An arrangement where a business/service provider takes an agreed payment directly from your bank account.
If you save $50 every fortnight, how much will you have after 6 fortnights?
$300.
Your washing machine breaks and repairs cost $250. What could you use to pay for it?.
Savings/emergency funds, depending on available funds and circumstances
Why is it useful to know when your bills are due?
So you can make sure enough money is available when the payment is taken.
You have $50 left until payday and want to buy a $45 game. What should you consider first?
Whether you have enough money for essential expenses before payday.
Your internet bill is $80 every month. How much would you need to allow for it over 6 months?
$480.
You want to buy something that costs $600 and can save $75 per fortnight. Approximately how many fortnights will it take?
8 fortnights.
You have $300 until payday but still need groceries and petrol. Your friend invites you out for a $100 dinner. What should you consider?
Essential upcoming expenses and whether $100 is affordable after those expenses.
You have $2,000 income and $1,500 of regular expenses. Is the remaining $500 automatically "spending money"?
No. You may still need to budget for groceries, unexpected expenses, savings and other costs.
You want new headphones but your electricity bill is due tomorrow. What should you prioritise?
The electricity bill/essential expense, assuming it is due and needs payment.
You are paid fortnightly but your electricity bill comes every 3 months. What could you do to make sure the money is available?
Set aside part of each pay for the upcoming bill rather than waiting until it is due.
Why might it be useful to have an emergency savings fund?
To help cover unexpected expenses without needing to rely on credit or other people.
You realise three different bills are coming out of your account next week. What should you check?
Account balance, bill amounts, payment dates and whether enough money will remain for other essential expenses.