Upgrade to remove ads
Only $2.99/month

8.2 - Budgets are Beautiful

Terms in this set (9)

Disposable Income
The money that you have left to spend or save as you wish after you pay your taxes and other deductions, such as Social Security. It is sometimes called net income.
Fixed Expenses
Expenses that are relatively constant each month. These are a family's definite obligations such as a house payment, rent payment, car payment, and/or medical insurance.
Variable Expenses
Expenses that are likely to change in the short term. Examples include telephone bills, groceries, medical bills not covered by insurance, entertainment, recreation, and credit account purchases.
Net Worth
A measure of wealth determined by calculating the difference between one's assets and liabilities.
Positive Net Worth
When assets are greater than liabilities.
Negative Net Worth
When liabilities are greater than assets.
Assets
The things a person owns, including the value of any savings, house, car, and personal possessions.
Liabilities
The money owed to others such as payments on a home mortgage, car loan, credit card debt and/or college loans.
Balanced Budget
When a person's income is enough to pay their expenses each month, including money for saving.
Recommended textbook explanations

Principles of Economics

7th EditionN. Gregory Mankiw
786 explanations

Economics: Principles in Action

Arthur O'Sullivan, Steven M. Sheffrin
831 explanations

Economics: New Ways of Thinking

2nd EditionRoger A. Arnold
839 explanations

Economics: Principles in Action

Arthur O'Sullivan, Steven M. Sheffrin
816 explanations