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What is gross pay?

Back

Gross pay is the total amount of money earned by an employee before any deductions such as taxes, Social Security, and Medicare.

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What is net pay?

Back

Net pay is the amount of money an employee takes home after all deductions have been made from their gross pay.

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What are expenses?

Back

Expenses are the costs incurred by an individual for goods and services, such as rent, food, and entertainment.

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What is the difference between gross income and net income?

Back

Gross income is the total earnings before deductions, while net income is the earnings after deductions.

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What are wants in budgeting?

Back

Wants are non-essential items or services that individuals desire but do not need for basic survival.

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What are needs in budgeting?

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Needs are essential items or services required for basic survival, such as food, shelter, and clothing.

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How do you calculate net income?

Back

Net income is calculated by subtracting total deductions (taxes, Social Security, etc.) from gross income.

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What is a budget?

Back

A budget is a financial plan that outlines expected income and expenses over a specific period.

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What is the purpose of budgeting?

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The purpose of budgeting is to manage finances effectively, ensuring that income covers expenses and savings goals are met.

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What is discretionary spending?

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Discretionary spending refers to non-essential expenses that can be adjusted or eliminated, such as dining out or entertainment.