Budgeting L1&2
A plan for your money.
What is another name for "Net Income"?
Take-home pay.
What is Murphy's Law?
Anything that can go wrong will go wrong.
Compound Growth.
What is the most common type of account?
Savings account.
What are the four parts of a budget?
Income, giving, saving, and spending.
How often should you create a budget?
Every month/Monthly.
Throw back question. What is the third foundation?
Pay cash for a car.
The initial amount of money invested or borrowed is called what?
The Principal.
Government agency responsible for ensuring that the money you save/invest in an account is secure.
The common misconception about budgeting is that it limits your spending when in actuality it does what?
Gives you the freedom to spend.
What is the name of a budget where total income subtracted by total expenses equals zero?
Zero-based budget.
What percentage of Americans have zero money saved up?
14%.
In lesson 5 we talked about Jack and Blake, who were both able to save over a million dollars for retirement. Why was Jack able to save more money than Blake?
He started saving earlier.
This account has higher interest rates but also has a higher minimum balance requirement.
Money Market Account.
95% of Americans say that budgeting is important, but how many are actually budgeting?
35%.
What percentage of millionaires create a budget?
95%.
The amount of interest charged on a debt but not yet collected; interest that accumulates from the date a loan is issued.
Accrued Interest.
What is the concept that an amount of money today is worth more than in the future due to earning potential?
Time Value of Money.
This account is tax deferred and has steep penalties for withdrawing your money early.
Retirement account.
How many expense types are there and what are they?
Four. Fixed, variable, intermittent, and discretionary.
What is it when you earn a percentage of total sales made and what type of income does this give you?
Commission. An Irregular Income.
Common marketing scheme used to get people to open up lines of credit/take out loans.
Zero interest deals.
This is something that you need to pay attention to as you get older and start to save/invest your money, as it has an affect on prices across the board.
Inflation.
This account is more secure than investing in stocks and gives you the opportunity to diversify your investments, however your return is still not guaranteed.
Mutual Funds.