Benefits of Budgeting
A written plan for giving, saving, and spending
What is a budget?
What is 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.
Flows two ways in and out
What is money?
What is a Fixed Expense?
expense that remains the same from month to month
What is net income?
What a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay.
What should you do after spending some money?
Just record how much you spent and subtract it from the budget category.
What is Commission?
earnings based on a percentage of the sales made
Your biggest wealth building tool is your income
What is a monthly budget?
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 Growth Income?
The amount you earn before taxes and other payroll deductions.
What should you not spend money on?
Things that don't matter because they can always come later on.
How much does a American household spend their annual income?
90% of thier annual income
Yet 33% of those without debt say they never worry about their finances.3
What is the other percentage of people that do not worry about their finances because they do not have any debt.
What is Intermittent Expense?
expense that occurs at various times throughout the year and tends to be in large, lump sums
What is the method for budgeting?
Is the one you feel most comfortable with and the one you’ll use.
What if You Go Over your budget?
You’ll have to cut back on how much you planned for one category to balance out what you overspent in another.
_______ is the ability to delay gratification.
Maturity
How may people in America budget?
What is a Discretionary (Nonessential) Expense?
An expense for something you do not need
What will change after high school?
Your income and budget will change. You’ll have more money, more expenses,
What is simpler tracking your expenses or creating budget?
Tracking your expenses
What is the first foundation?
Save a $500 emergency fund.