Personal Finance Lesson #6 Budgeting

A budget can be defined as

A detailed summary of estimated expenses over a period of time

A type of canary

The amount needed for a house down payment

A working list of expenses

A long-term budget can do what?

Pay for current expenses

Pay for large expenses in the future, like a home deposit, kitchen appliance, or college tuition

Pay current tuition

Pay bills for your grandchildren

A short-term budget can do what?

Plan a budget for your lifespan

Plan a budget for your dog's lifespan

Help plan expenses that are immediate and recurring like the electric bill, car payment, etc.

Help plan expenses that are over years

A fixed expense is an example of what?

A monthly cost that doesn't vary much from month to month like your rent, car payment, or insurance

A monthly cost that varies greatly like seasonal electric bills

A recurring monthly cost, with interest

The cost of a home repair

A variable expense is an example of what?

An expense that does NOT change over time

An expense that stays constant

An expense that varies, or changes over time

An expense that compounds interest

A budget can do what?

Help to track monies in and monies out

Help you save for a big purchase

Help you pay off a bill like a car, credit card, or mortgage

Help you spend money wisely

There is a magic formula to help people budget

True

False

Budgets require what?

Honesty

Effort

Determination

Hard work

Knowing what you spend is a great way to help you save in some areas

True

False

About 6% of people have retirement accounts, but 100% of people have bills.

True

False

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