The process of setting aside money until a future date instead of spending it today.
What is Savings
An organized plan for saving and spending based on your expected income and expenses
What is a budget
Anything that is owned by an individual. With respect to savings and investing, these are generally categorized as liquid or capital.
What is an Asset
Money earned in exchange for work, or received from investments, allowance, or gifts
What is Income
The act of paying money for something
What is Spending
A situation where money is left over after all obligations have been paid
What is a budget surplus
The things people pay for with their money
What are expenses
The process of setting money aside to increase wealth over time and accumulate funds for long term financial goals such as retirement
What is Investing
An amount of money set aside to cover bills in case of emergency
What is Emergency Fund
A situation where income and expenses are equal
What is a balanced budget
Expenditures that change each month and can be reduced or eliminated if necessary
What is Flexible Expenses
Money owed to individuals, businesses or institutions
What is a Liability
Making purchases without comparing costs or benefits beforehand
What is impulse spending
A situation where there is not enough money to cover expenses
What is a budget deficit
What is a Disposable Income
The total value of a person or company, which can be calculated by subtracting liabilities from total assets.
What is Net Worth
A plan of action that allows a person to meet not only the immediate needs, but also the long term goals.
What is a Financial Plan
To write down information about a transaction or series of transactions
What is Record Keeping
The process of analyzing exposure to risk and determining the best way to handle such exposure
What is Risk Management
The concept of putting aside a sum of money into savings each month before paying other bills
What is Pay Yourself First