Money Smarts - Budgeting Basics

Which of the following is not a potential benefit of budgeting?

• Reaching long-term goals

• Building up an emergency fund

• Increasing income

• Avoiding debt

Which of the following is an example of a fixed expense you need to include in your

budget?

• Entertainment

• Food

• Gas

• Rent

True or false: If you develop a budget, at least you don’t have to worry about debt.

• True

• False

What’s the first thing you should do with any extra income?

• Build up your emergency fund

• Invest for a long-term goal

• Quit your part-time job

• Think of something you really want and buy it—you’ve earned it!

Budgeting makes it easier to manage credit if you:

• Have an emergency fund to pay your credit card bills

• Figure out what you can afford to repay before you borrow

• Borrow only to cover wants

• Consider credit as a flexible, rather than a fixed, expense