Budgeting

Terms in this set (28)

50/30/20 Budget
A budgeting method that allocates 50% to needs, 30% to wants, and 20% to savings and debt repayment
Auto Lease
A type of auto financing that allows you to "rent" a car from a dealership for a certain length of time and amount of miles. Once the time period ends, you either return the car or purchase the car if that is an option in your contract.
Budget
A plan of your expected income and how you will use it to meet your expected expenses over a period of time
Cash Envelope Budget
A budgeting method where money for monthly spending is taken out in cash and placed in labeled envelopes according to budget categories. Spending occurs only from the corresponding envelopes.
Cost of Living
The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare; often used when comparing how expensive it is to live in one city versus another
Deduction
Any items subtracted from your paycheck, including state and federal income taxes, Social Security, health insurance or 401(k) contributions
Deficit
When your expenses exceed your income
Down Payment
A portion of the total cost of an item, such as a car or house, that must be paid at the time of purchase. The buyer will often take out a loan to finance the remaining balance.
Expenses
Items or services you pay for such as rent, groceries, entertainment, bills, etc.
Fixed Expense
A cost that can be expected at regular intervals and that remains the same amount (e.g., monthly rent payment)
Freelancer
An individual who earns money on a per-job or per-task basis, usually for short-term work. They are not an employee of an organization.
Gig Economy
A labor market where the majority of people have short-term jobs or gigs such as freelancing and temp jobs rather than long-term employment
Gross Pay
Total earnings before any deductions are taken
Income
Money that is received from work, investments, business, etc.
Needs
Expenses that are essential for you to be able to live and function
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