Money Management Skills

Front

What is the first step in creating a budget?

Back

Determine income and expenses

Front

What is the difference between fixed and variable expenses?

Back

Fixed expenses are costs that remain the same every month, while variable expenses can change from month to month.

Front

Why is it important to track your expenses?

Back

To understand spending habits and make informed financial decisions.

Front

What is the 50/30/20 rule of budgeting?

Back

A guideline for allocating income into needs, wants, and savings/debt repayment.

Front

What are some common financial goals?

Back

Saving for retirement, buying a house, paying off debt, saving for education, and building an emergency fund.

Front

What is the difference between a debit card and a credit card?

Back

A debit card allows you to spend money from your own funds, while a credit card allows you to borrow money up to a limit.

Front

What is the concept of compound interest?

Back

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Front

What is the difference between a checking account and a savings account?

Back

A checking account is used for everyday transactions, while a savings account is for long-term savings.

Front

What are some potential risks of borrowing money?

Back

High interest rates, debt accumulation, financial strain, and potential damage to credit score.