| A | B |
|---|
| Budget | a list of all planned expenses and revenues—a plan that shows what money you plan on spending |
| Envelope system | Storing a set amount of money in an envelope each month for a specific incident. The envelope system helps prevent overspending in a particular category because you have the cash set aside for the month. If you don’t have the cash in the envelope, you cannot make the purchase—unless you adjust another category. |
| Zero-based budget | A zero based budget is a very straight forward budget which works on the premise of assigning each dollar of income a task – or to put it another way, at the end of the month, there shouldn’t be any money left over in the budget |
| Why is it important to tell your money what to do? | A budget allows you to know where you are with your personal finances, and tells you if you can get where you want to go with your financial goals. |
| How is a budget like a “blue print”? | Like a blue print.. a budget is a plan that you will need to follow when spending your money. |
| Why is it going to take several attempts before you “get a clue” on how to set your budget? | Because it is trial and error. It is going to take several attempts (months) before you figure out where you are spending your money.. how much you will need for certain categories, and how to say “NO” to the things that you overspend on. |
| On average, how long will it take before your budget begins to work effectively? | 3 months |
| A budget will not work if you fail to do what? | Leave things out |
| What should you do if you overspend in one particular budget category? | Immediately sit down and adjust another category to make up for the difference. |
| What does “balancing” mean in terms of a checking account? | Keeping a running balance of your checking account. Making sure that you write down every time you make a purchase, deposit or withdraw money from the account. |
| What is an outstanding check? | A check that you have written that has not cleared your bank yet. |
| What is an outstanding deposit? | A deposit that you have made that has not shown up in your account yet. |
| Why is it important to “reconcile” with your bank statement? | You need to look at the bank statement and your check register to make sure that there are no mistakes on your part or the banks part. You might have forgotten to write a check down, there might be an outstanding check, deposit, etc. |
| When you are finished comparing your bank statement to your account register, what do you often discover? | The balance on each is different due to outstanding checks, outstanding deposits, etc. |
| What does NSF stand for? | Insufficient funds |
| What does it mean if your checking account is overdrawn? | It means that you have written a check for more than you actually had in your checking account (or used your debit card for a purchase of more than you had in your checking account) |
| If not used properly why can debit cards be Budget Busters? | Because most people do not keep track of where they are spending their money when using a debit card. |
| Explain how a budget can be a “straight jacket”? | Some people feel that a budget controls or restricts their spending, much like being in a straight jacket. |
| If it’s not in the budget.. what is the new word that you learn? | No! |
| You may have to tell yourself “no”.. so that one day you can tell yourself what? | Yes |
| Some people are reluctant to creating a budget because previous attempts have not worked… why? | Because they did not do it properly.. they were unrealistic with the amounts that they put in each category, they felt like the budget was controlling their spending. They may have tried it for a month and gave up.. not realizing that it was trial and error. |
| Another reason that people do not want to do a budget is fear.. fear of what? | What they will find.. fear of actually looking at where they are spending their money. How incompetent they are with their money |
| When do you have crashes in your budget? | When you have an unrealistic budget. |
| If you are struggling financially and are behind on your bills, what should you budget first? | Necessities; the four walls. |
| Why is it a problem if your budget is too complicated? | If it is too complicated, you will not follow it. You will give up because it is too complex and too unrealistic. |
| How often do you create a budget? | Every month |
| Who’s fault is it if you do not like something that is in your budget? | Yours! |
| A budget, if worked and planned.. will remove what from your financial situation? | Crisis |
| What happens to your money when it is managed? Why? | It goes further.. has more muscle. |
| What will remove “money fights” from your marriage? Why? | Managed money plans; created unity |
| When you have a plan for your money.. what feelings will go away? | Guilt, shame, fear |
| What is a “bounced check”? | When you write a check for more than you actually have in your checking account. |
| What is the “blow” category and Why do you need it? | Money you can blow; need a little bit of wiggle room. Unexpected events or items are going to come up, so you need some money for it; need to account for every penny. |
| Why does your income minus outgo total need to total up to zero? | Because you will end up spending the money and you will not know where it went. Need to account for every penny. |
| What do you do with extra money? | Put on baby step you’re working on. |
| Why is it important that you write down on paper how you plan on spending each every month? | So you know where your money goes, good habits, practice makes perfect |
| What is it called when your income minus expense equal zero? | zero-based budget |
| T/F Another name for a budget is a cash flow plan. | True |
| T/F A zero-based budget is only used for people that have zero debt | Fals |
| T/F It usually takes three months for your budget to begin working well. | True |
| T/F You should make a new budget every month | True |
| T/F The envelope system includes using credit cards for emergencies | False |
| T/F You should always reconcile your checking account to your bank statement within three weeks of receiving it. | False |
| T/F Over time, a budget will most likely lead to more stress and money fights | False |
| T/F A zero-based budget means you have spent every dollar of income before the month begins | True |
