2.1
What is a Budget?
a written plan for giving, saving, and spending
What is an income?
money received for work, as a gift, or through investments
What is a Zero-Based Budget?
a cash-flow plan that assigns an expense to every dollar of your income; the goal is for the total income minus the total expenses to equal zero.
What is a Cash-Flow Statement?
a record that summarizes all of the income and outgo (spending) over a certain time period
What is Irregular Income?
income that comes in at different amounts or at different times, or both
Why is it important to have a budget?
so you’re in control of your money, and you don’t have to wonder where it all went.
What is a fixed expense?
expense that remains the same from month to month.
What is a Net Income?
what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay.
How much does the average household spend on groceries each month?
$370.
What is commission?
earnings based on a percentage of the sales made
What percentage of Americans believe that you need a budget?
95%.
What is a Variable Expense?
expense that varies in dollar amount from month to month but that you can expect to have every month.
What is a Gross Income?
the amount you earn before taxes and other payroll deductions.
How much does the average household spend on eating out?
$290.
The average American household spends how much on their annual income...
90%.
How much of personal finance is head knowledge?
20%.
What is an Intermittent Expense
expense that occurs at various times throughout the year and tends to be in large, lump sums.
What is the best way to budget?
A zero based budget.
What is the hardest part of tracking your expenses?
Getting into habit.
What percentage of students who took this course talked to their family about money or finances this month?
65%
Why should you have a budget?
It’s the key to making all your financial goals a reality—like saving, paying off debt (if you have it) and, one day, building wealth for retirement.
What is a Discretionary (Nonessential) Expense?
expense for things you don’t need.
What are the Five Foundations?
1. Emergency fund of $500.
2. Get out and stay out of debt.
3. Pay cash for your car.
4. Pay cash for college.
5. Build wealth and give.
What is the most convenient way to track budgeting?
The most convenient way to track your expenses is with a budgeting app that connects to your bank account.
How many Americans are self-employed and many others work on straight commission?
More than 15 Million.