Budgeting Basics

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What is a personal budget?

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A personal budget is a financial plan that helps individuals track their income and expenses.

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What is the difference between needs and wants?

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Needs are essential for survival, while wants are desires that are not necessary for survival.

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Why is it important to set financial goals?

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To prioritize spending, save money, and work towards desired financial future.

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What are some common financial goals? Options: Investing in stocks, starting a business, buying a luxury car, taking extravagant vacations; Spending all income on immediate wants and needs, not saving any money; Borrowing money to fund a lavish lifestyle.

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

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What is a budget plan?

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A budget plan is a detailed outline of an individual or organization's income and expenses over a specific period of time.

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What are the steps involved in creating a budget plan?

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Determine income, track expenses, set goals, create template, allocate funds, monitor and adjust

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How can you differentiate between fixed and variable expenses?

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

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What are some strategies for managing debt?

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Creating a budget, prioritizing debt payments, negotiating with creditors, consolidating debt, seeking professional help if needed

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Why is it important to have an emergency fund?

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To provide a financial safety net for unexpected expenses or emergencies.

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What are some ways to save money on a tight budget?

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Creating a budget and sticking to it, cutting unnecessary expenses, finding cheaper alternatives, saving on utilities, and reducing debt.