Day 1: Budgeting Basics
What is a budget?
Answer: A plan for how to spend and save money.
What is the purpose of a savings account?
100: What is the purpose of a savings account?
What is income?
Answer: Money earned from work or other sources.
What is credit?
Answer: Borrowing money to pay later.
What is the difference between a “need” and a “want”?
Answer: A need is necessary for survival; a want is something you desire but don’t need.
What are the two main categories in a budget?
Answer: Income and expenses.
Name one type of bank account besides savings.
Answer: Checking account.
Name two types of income.
Answer: Earned income (from a job) and passive income (from investments).
What is a credit score?
Answer: A number that shows how trustworthy you are with borrowing money.
What is a comparison shop?
Answer: Looking at prices and features from different sellers before buying.
What is the difference between fixed and variable expenses?
Fixed expenses stay the same each period; variable expenses can change.
What is interest?
Answer: Money earned on your savings or charged on borrowed money.
What is a paycheck?
Answer: The money you earn from working, usually paid regularly.
What is a loan?
Answer: Money borrowed that must be paid back with interest.
Why is it important to read product reviews?
Answer: To learn about the quality and performance of the product before buying.
Why is it important to track your spending?
Answer: To know where your money goes and avoid overspending.
What is a debit card?
Answer: A card linked to your bank account used to pay directly with your own money.
What does it mean to be an entrepreneur?
Answer: Someone who starts and runs their own business.
What can happen if you don’t pay your credit card bill on time?
Answer: You can be charged late fees and damage your credit score.
What is an impulse purchase?
Answer: Buying something without planning or thinking it through.
What does it mean to have a “balanced budget”?
Answer: When your income equals or exceeds your expenses.
Why is it important to have an emergency fund?
Answer: To cover unexpected expenses without going into debt.
Why is it important to understand your paystub?
Answer: To know how much money you’re earning and what taxes/deductions are taken out.
What is the difference between secured and unsecured loans?
Answer: Secured loans are backed by collateral; unsecured loans are not.
What does “warranty” mean?
Answer: A promise from a seller or manufacturer to repair or replace a product if it breaks within a certain time.