Money Wise

What is budgeting?

• Budgeting is the process of creating a plan to spend money based on income and expenses.

• Budgeting is the process of randomly spending money without any plan.

• Budgeting is the process of saving money without considering income and expenses.

• Budgeting is the process of spending money based on emotions rather than financial goals.

Why is budgeting important?

• Budgeting restricts financial freedom

• Budgeting is important for planning, tracking finances, prioritizing spending, saving for goals, and avoiding debt.

• Budgeting is only for the wealthy

• Budgeting is a waste of time

List three categories you can include in your budget.

• Fixed expenses, Variable expenses, Savings or investments

• Emergency fund

• Flexible expenses

• Mandatory expenses

What is an emergency fund?

• An emergency fund is a financial safety net that individuals set aside to cover unexpected expenses or financial emergencies.

• An emergency fund is a type of investment account

• An emergency fund is unnecessary and a waste of money

• An emergency fund is used for planned expenses only

Why is having an emergency fund important?

• To provide a financial safety net for unexpected expenses or loss of income.

• To invest in risky ventures

• To buy unnecessary items

• To increase debt

What are some strategies to save money on groceries?

• Ignore expiration dates and buy in bulk

• Only shop at expensive specialty stores

• Make a shopping list, buy in bulk, use coupons, shop at discount stores, buy generic brands, and meal plan.

• Never compare prices or look for deals

How can you save money on transportation costs?

• Consider carpooling, using public transportation, biking or walking, planning trips efficiently, and maintaining vehicle for fuel efficiency.

• Taking a taxi everywhere

• Driving alone in a car

• Buying a new car with poor fuel efficiency

Explain the concept of 'pay yourself first'.

• Delaying saving until all expenses are paid

• Spending all your income on unnecessary purchases

• Investing in high-risk ventures without a safety net

• Prioritizing saving a portion of your income before allocating money to other expenses.

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

• Allocating 60% of income to needs, 20% to wants, and 20% to savings or debt repayment.

• Allocating 70% of income to needs, 20% to wants, and 10% to savings or debt repayment.

• Allocating 40% of income to needs, 30% to wants, and 30% to savings or debt repayment.

• Allocating 50% of income to needs, 30% to wants, and 20% to savings or debt repayment.

How can you avoid impulse buying?

• Create a shopping list, set a budget, avoid shopping when hungry or tired, and wait 24 hours before making a purchase.

• Go shopping with friends who encourage impulse buying

• Make purchases based solely on emotions without considering the consequences

• Ignore your budget and spend freely