BUDGETING BASICS
It's a budgeting rule that suggests spending money on needs, wants, and on savings.
What is the 50/30/20 rule
What is the difference between a checking account and a savings account?
A checking account is for everyday spending, a savings account is for storing money long-term.
Borrowed money you agree to pay back later, often with interest.
What is credit
What’s the difference between saving and investing?
Saving keeps money safe with low growth, investing involves risk but can grow more over time.
You just got your first paycheck. What's the first thing you should do before spending it?
Make a budget or plan where your money will go
Give one example of a “need” and one example of a “want.”
Need = food; Want = new video game.
What happens if you spend more money than you have in your bank account?
You may get charged an overdraft fee.
A number that shows how responsible you are with borrowing and repaying money.
What is a credit score ?
What is a stock?
A share of ownership in a company.
Your part-time job pays you in cash. What should you do to keep your money safe and manage it wisely?
Deposit it into a bank account, track spending, and create a budget.
What would you do if you overspent your budget this month?
Cut back spending the next month or adjust by removing non-essentials.
What does it mean to “overdraft” your account?
It means spending more money than your account balance allows.
Name one thing that helps your credit score and one that hurts it.
Helps = paying on time; Hurts = missing payments.
Name one place you can invest money besides the stock market.
Real estate, business, bonds, or even yourself (education/skills).
You want to hang out with friends this weekend, but your monthly budget is almost gone. What’s a smart choice?
Suggest a free or low-cost activity so you stay on budget while still having fun.
You have $500/month. How much would go toward savings using the 50/30/20 rule?
$100 (20% of $500).
Name two safe places to keep your money instead of cash at home.
Bank accounts and digital wallets (like Cash App, Venmo).
Why is having good credit important?
It helps you get approved for loans, credit cards, or renting an apartment.
If you invest $10 a month starting at age 14, why could you have more money by age 30 than someone who starts at 24?
Because of interest and a longer time for the money to grow
You get scammed online. What steps should you take next?
Report it, freeze cards if needed, and tell a trusted adult or financial institution.
Create a mini 3-item budget using a $100 fake paycheck.
Example: $50 for food (need), $30 for concert ticket (want), $20 to savings.
You have $100 in your account. You spend $120. What happens next?
You overdraft and could be charged a fee by the bank.
You have a credit score of 520. Would you be approved for an apartment or car loan easily? Why or why not?
Probably not. A 520 score is considered poor and lenders see it as risky.
You invest $50 in a company that doubles every year. How much do you have in 3 years?
$400 (Year 1 = $100, Year 2 = $200, Year 3 = $400)
You have a big school project due and you're tempted to buy an expensive app to help, but you also need to save for a new phone. What’s a financially smart decision?
Look for a free version of the app or use school resources so you can stay focused on your savings goal.