Budget Basics

What is a budget?

• A tool used to calculate taxes.

• A tool used to plan for building a house.

• A tool used to track and plan for income and spending (expenses).

• A tool used for calculating how much savings interest can be earned

Below is a list of Jackie's financial activities for a week.

What activities would be considered expenses for Jackie? Check all of the ones that are expenses.

• She earns $25 for pet-sitting.

• She spends $10 on pizza.

• She gives a friend a $20 gift card for their birthday.

• Her parents give her $30 for doing extra chores around the house.

• She spends $10 on a new t-shirt.

Below is a list of Jackie's financial activities for a week.

What activities would be considered income for Jackie? Check all of the ones that are considered income.

• She contributes $5 to a class party.

• She earns $25 for helping a neighbor do some gardening.

• She spends $20 on movie tickets and snacks

• Her parents give her an allowance of $25 for the week.

• She spends $10 on a new t-shirt.

Jackie usually earns $60 a week, but usually spends $30 a week. How much can Jackie save in a month (4 weeks)?

• $30

• $60

• $90

• $120

Jackie realizes it will take her 5 months to save for her new phone. She wants to purchase it within at least 3 months. What are the ways she can adjust her budget to purchase it sooner? Check all that apply.

• She can decrease her expenses.

• She can increase her expenses.

• She can increase her income.

• She can decrease her income.

How can creating a budget help you?

• It can help me to stay focused on my financial goals.

• It will allow me to spend more money than is necessary.

• It will help me in calculating my taxes.

• It will allow me to stay physically healthy.

Which of the following is a true statement about budgets?

• They help you spend as much as you can.

• You can earn more money if you have a budget.

• You will be able to spend and earn the same amount.

• They help people keep track of their finances.

Which of the following is an essential expense?

• rent/mortgage

• new dress

• vacation

• a new video game

Which of the following is a nonessential (want) expense?

• mortgage payment

• utility bill

• vacation

• groceries

Which of the following statements is true?

• You want to spend more than you earn.

• You want to save more than you earn.

• You want to earn more than you spend.

• You do not need to save money for unexpected expenses.