Budgeting and Financial Terms

Cash Envelope Budget

• A method of budgeting that uses digital tools to track expenses.

• 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.

• A financial strategy that involves investing in stocks and bonds.

• A technique for saving money by avoiding all unnecessary expenses.

Variable Income

• Income that remains constant over time.

• Income that varies from week to week or month to month.

• Income that is guaranteed regardless of circumstances.

• Income that is only received annually.

Wants

• Expenses that help you live more comfortably.

• Basic necessities for survival.

• Savings for future investments.

• Unnecessary purchases that do not add value.

Residential Lease

• A contract between a tenant and a landlord providing the terms and costs for renting the property.

• An agreement for the sale of a property between a buyer and a seller.

• A document outlining the rules for property maintenance and management.

• A legal notice to vacate a rental property.

Wealth

• A measurement of your assets minus your liabilities; also called net worth.

• The total amount of money you earn in a year.

• The value of your investments in the stock market.

• The amount of money you spend on luxury items.

Budget

• A plan of your expected income and how you will use it to meet your expected expenses over a period of time.

• A detailed list of all your expenses without considering income.

• A method to save money by cutting down on unnecessary expenses.

• A financial statement that shows your net worth at a specific point in time.

Deficit

• When your expenses exceed your income.

• When your income exceeds your expenses.

• When your savings are higher than your expenses.

• When your expenses and income are equal.

Cost of Living

• The total income earned by an individual in a year.

• The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare.

• The average price of goods and services in a specific area.

• The difference in salary between two professions.

Net Pay

• Total earnings before any deductions are made.

• Total earnings after payroll taxes and other deductions have been taken out; also called take-home pay.

• Total amount of taxes paid by an employee.

• Total earnings including bonuses and overtime pay.

Fixed Expense

• A cost that varies each month based on usage.

• A cost that can be expected at regular intervals and that remains the same amount (e.g., monthly rent payment).

• A one-time payment that does not recur.

• A cost that is only incurred during specific seasons.