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Disposable Income

Income after taxes

Budget

A plan on how to save and spend your money

Variable expense

kinds of spending that can be controlled and typically change from month to month.

Discretionary Income

Income that is left over after taxes AND aconsumer's necessary expenses

Fixed expense

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

Debt Snowball

When you pay off your smallest debt first and then use that money to pay off your 2nd biggest debt and then...

Emergency Fund

a savings account you can access quickly to pay for unexpected expenses or emergencies

Zero-based budget

A budget that accounts for every dollar earned. The amount coming in matches the amount going out or saved.

income

A persons wealth in money

Debit Card

a card used to withdraw money from a checking account

Overdraft

When someone has insufficient funds to cover the full amount of the check they wrote.

debt avalanche

pay off debts progressively, starting with the highest INTEREST RATE first

7 steps to financial peace

1. $1000 in an emergency fund 2. Pay of debt (snowball) 3. 3-6 months of savings 4. 15% of income toward retirement in a ROTH 5. College funding 6. Pay off home early 7. Build Wealth and give back

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