Creating a Personal Budget
Learning Objective
I can create a personal budget to track income and expenses.
Key Concepts
The 50/30/20 budget framework allocates 50% of your income to needs, 30% to wants, and 20% to savings and debt repayment.
Needs include essential expenses like rent, utilities, and groceries, while wants cover non-essential items such as vacations, eating out, and entertainment.
The savings category includes contributions to an emergency fund, retirement accounts, and debt payments beyond the minimum required.
Practice Questions
This lesson includes 12 practice questions to reinforce learning.
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1. According to the 50/30/20 budgeting rule, what percentage of your income should ideally be allocated to needs?
2. Explain the difference between a 'need' and a 'want' in the context of budgeting, and provide an example of each.
3. List three examples of expenses that would typically fall under the 'savings' category in the 50/30/20 budget.
...and 9 more questions
Educational Video
How to Make a Budget | 50/30/20 Rule of Budgeting Explained
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