The Basics
What is a budget?
A budget is a plan you write down to decide how you will spend your money each month.
Bills that are the same each month:
Car payment, rent (during lease term) , entertainment/streaming services.
Food is consider a:
Need
What was the name of the magician in the Money Magic budgeting game we played in class?
Enzo
What is the principal payment for a car loan?
The money that you originally agreed to pay back for the car.
What documents should you review in order to determine your monthly budget?
Your pay stub, regular bills, and any other anticipated monthly expenses.
Bills that might change each month:
Home utilities
Netflix or Hulu would be considered a:
Want
What is cash envelope budgeting?
When one puts their cash into envelopes for select categories. When an envelope runs out of money, there is nothing left to spend on that portion of the monthly budget.
The cost of borrowing money to buy the car.
What is an expense?
An expense is money you spend.
Bills you might pay once or twice a year
Car insurance
You should only contribute how much to wants in your monthly budget according to the 50/30/20 rule:
30%
What type of fund should you have in savings for unexpected expenses?
An emergency savings fund.
What is a down payment in relation to a car loan?
A down payment on a car refers to an initial sum of money applied to the car loan at the time of purchase.
What is an income?
The amount of money you earn from a job.
True or False: Bills can be both wants and needs
True
You should only contribute how much to needs in your monthly budget according to the 50/30/20 rule:
50%
True or False: In zero based budgeting, all of your money is put into a category until you are at $0.
True
What is now the longest loan term in which some lenders will allow for a car loan. It is not recommended.
96 months (8 years)
True or False: Everyone has the same monthly budget, no matter their income.
False
If you don't have the funds to cover bills that meet your basic needs, you must cut back on your:
Wants
You should only contribute how much to savings in your monthly budget according to the 50/30/20 rule:
20%
In the money magic budgeting game, you completed this type of budgeting:
Zero Based Budgeting
What is the name of Mr. Adams' dog. It was mentioned in the class introduction.
Enzo