Budgeting Basics

What is the purpose of having a $500 emergency fund?

• To invest and grow your money

• To cover unexpected expenses without going into debt

• To buy new shoes and clothes

• To donate to charity

Why is it important to save for emergencies?

• To prepare for a pandemic

• To have extra money for shopping

• To be financially stable in case of unexpected events

• To invest in the stock market

What should you do with your emergency fund once you have $500 saved?

• Invest it in stocks

• Keep it in a separate savings account

• Spend it on new clothes and gadgets

• Donate it to charity

How much should your emergency fund be once you're out of school and have zero debt?

• 1-2 months of living expenses

• 3-6 months of living expenses

• 7-9 months of living expenses

• 10-12 months of living expenses

What is the purpose of an emergency fund?

• To be used for wants and desires

• To be invested in real estate

• To provide insurance against unexpected events

• To donate to charity

When is it okay to use your emergency fund?

• For any planned event or occasion

• For unexpected emergencies only

• For urgent wants and desires

• For investing in the stock market

What should you do if you need to use your emergency fund?

• Forget about it and never replace it

• Replace the money as soon as possible

• Invest the money in a business venture

• Donate the money to a charity

Budgeting is crucial to your financial success.

• True
• False

If an expense can NOT be removed from your budget to save money, it is considered a _____.

• Income

• Want

• Need

• Savings

Examples of Fixed Expenses include:

• Mortgage, loans, rent
• Cable, entertainment, food
• Gas, food, phone
• Clothing, gas, food