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6 terms

Financial Peace Chapter 7 Key Terms

STUDY
PLAY
Budget
cash flow plan; assigns every dollar to a specific category/expense at the beginning of each month.
Discipline
self-control used in directing behavior; the key to wealth building is being consistent over time.
Envelope System
series of envelopes, divided into pre-determined categories, used to store cash for planned monthly expenses; self-imposed discipline tool to assist people in managing their monthly finances; possible categories include food, entertainment, gas, etc.
Impulse Purchase
To buy an item without thinking about it.
Reconcile
to match your bank statement with your checkbook, preferably within 72 hours of receiving the statement.
Zero-Based Budget
cash flow plan that assigns an expense to every dollar of one's income, wherein the total income minus the total expenses equals zero.