Saving and Spending Flashcard

Front

What is budgeting?

Back

The process of creating a plan to manage and allocate financial resources.

Front

Why is budgeting important?

Back

Budgeting helps in planning and managing finances effectively.

Front

What is a savings account?

Back

A type of bank account where you can deposit money and earn interest on the balance.

Front

What is the purpose of a savings account?

Back

To store money for future use while earning interest on the balance.

Front

What is the recommended percentage of income to save each month?

Back

20%

Front

What is an emergency fund?

Back

A savings account specifically set aside for unexpected expenses or emergencies.

Front

What is the purpose of an emergency fund?

Back

To provide financial security in case of unexpected expenses or emergencies.

Front

What is the difference between fixed expenses and variable expenses?

Back

Fixed expenses are costs that remain the same every month, while variable expenses can change from month to month.

Front

What is an example of a fixed expense? Options: Rent, Groceries, Entertainment, Vacation

Back

Rent

Front

What is an example of a variable expense? Rent, Salary, Mortgage, Groceries

Back

Groceries