Personal Finance Ch. 2

18 terms by mehtesham 

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Money Management

planning how to get the most from your money

Assets and Liabilities

a balance sheet shows a company's profit and loss

Pay yourself first

Taking out a portion of a paycheck for saving or investing before using any of the check for spending.

fixed expense

expenses which stay basically the same from month to month, such as housing and transportation.

variable expense

costs that vary in amount and type, depending on events and the choices you make

Income

earnings from work or investments

Gross pay

the total amount of an employee's earnings before deductions are taken out

Net Pay

the total earnings paid to an employee after payroll taxes and other deductions

budget

a summary of intended expenditures along with proposals for how to meet them

personal financial statement

a document that provides information about an individual's current financial position and presents a summary of income and spending

Discretionary income

disposable income available for spending and saving after an individual has purchased the basic necessities of food, clothing, and shelter

cash flow statement

A measure of the money you receive and the money you spent

Current Liabilities

liabilities due within a short time, usually within a year

Investment Assets

Money which has been invested long-term which will provide future income

Market Value

the price at which buyers and sellers trade the item in an open marketplace

Long-term Liabilities

liabilities owed for more than a year

Liquid Asset

an asset that can quickly be converted into cash with little risk of loss

Personal Possessions

type of asset that includes automobiles, electronics, jewelry

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