Budgeting

Terms in this set (25)

Budget
A plan of your expected income and how you will use it to meet your expected expenses over a period of time
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
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
Unit Price
The cost for one item or measurement that allows it to be easily compared to other products to evaluate which is a better deal
Wage
An amount of money paid to an employee at a specific rate per hour worked.
Salary
A fixed amount of money paid to an employee for each pay period.
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
Residential lease
A contract between a tenant and a landlord providing the rules and costs for renting the property
Freelancer
An independent contractor who provides a specific service for a certain period of time so after that service is fulfilled they no longer work with the company.
Expenses
Products, services, or bills you are responsible for paying
Fixed Expense
Cost that can be expected at regular intervals and that remains the same amount (e.g., monthly rent payment)
Gross Pay
Total earnings before any deductions are taken
Income
Money that is earned from work, investments, business, etc.
Needs
Purchases a person must have to live or succeed or bills that must be paid to remain in good standing
Net Pay
Total earnings after payroll taxes and other deductions; also called take-home pay
Surplus
When your income exceeds your expenses and you have money leftover
Wealth
The total value of money and other assets, minus outstanding debts
Variable Expense
Cost that appears irregularly or that changes in amount (e.g., utility bills)
Cash Envelope Budget
Financial plan where money for all variable spending is taken out in cash and placed in labeled envelopes by budget category and then spending occurs only from the envelopes
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Zero-Based Budget
Financial plan where every anticipated earning is assigned a role to be spent, saved, or invested somewhere, so there's no "leftover" money with no purpose
Pay yourself first
To automatically save a specified amount from your paycheck before budgeting it into any other category
50/30/20 Budget
Financial plan that allocates 50% to needs, 30% to wants, and 20% to savings and debt repayment
Wants
Nonessential purchases a person wants to feel happy, make life convenient, fit in with peers, etc
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