Budgeting Basics
This is the term for the amount of money you plan to spend or save each month for different categories like food, entertainment, and savings.
What is a budget?
This type of income is earned from your job or any work you do for others.
What is earned income?
The idea of paying yourself first means putting money into this before spending on anything else.
What is savings or investment?
This is the term for the amount you have saved in your retirement accounts by the time you reach retirement age.
What is retirement savings?
A program or app you use to track your spending and create a budget.
What is a budgeting app?
The process of tracking your spending to make sure you stick to your budget is known as this.
What is budgeting?
These types of expenses remain the same every month, like rent or mortgage payments.
What are fixed expenses?
A fund set up for long-term goals like retirement, often invested in stocks, bonds, or mutual funds.
What is a retirement fund?
This government-sponsored retirement plan is available to employees of private-sector businesses, with contributions often matched by employers.
What is a 401(k)?
This method of saving involves automatically transferring money from your checking account into savings on a regular basis.
What is automatic savings?
This percentage of your monthly income is recommended for savings, according to financial experts.
What is 20%?
This type of expense varies month to month, such as dining out or entertainment costs.
What are variable expenses?
This investment vehicle is designed to grow your savings tax-free for retirement.
What is a Roth IRA?
This is a strategy in retirement planning where you continue to work part-time or earn income even after reaching retirement age.
What is phased retirement?
This term refers to setting up a limit on how much you can spend in each category of your budget.
What is a spending limit or budget cap?
The two major types of expenses that you need to categorize in a budget: fixed and this.
What are variable expenses?
This is the term for setting aside money for unexpected costs, like car repairs or medical bills.
What is an emergency fund?
This is the percentage of return you earn on your investment each year, excluding fees and inflation.
What is the rate of return?
This term refers to the age at which you can start receiving full Social Security retirement benefits without penalty, based on your birth year.
Full retirement age
This type of financial account allows parents to save for their child’s education expenses, often offering tax advantages.
What is a 529 plan?
This is the term for money you set aside for future needs or goals, which could include short-term or long-term objectives.
What is savings?
The term for a tax deducted from your paycheck by your employer before you receive your wages.
What is withholding tax?
This investment strategy involves buying a broad range of stocks, bonds, and other assets to spread risk, and is often used in mutual funds and ETFs (exchange-traded funds).
What is asset allocation or diversification?
This retirement account is funded with pre-tax dollars, allowing your money to grow tax-deferred until you withdraw it in retirement.
What is a traditional IRA?
This popular app helps you track spending and create a budget by linking directly to your bank accounts.
What is Mint?