Income
This is money you earn before taxes and deductions.
what is gross income?
Rent and utilities are examples of this type of expense.
What are fixed expenses?
The common rule that suggests you spend 50% on needs, 30% on wants, and 20% on savings.
What is the 50/30/20 rule?
Using this type of card means you are borrowing money from the bank to make purchases.
What is a credit card?
This type of account helps you grow money for retirement, often with tax benefits.
What is an IRA or 401(k)?
This is your income after taxes and deductions are taken out.
What is net income (take-home pay)?
Eating out and entertainment are examples of these expenses that can change month to month.
What are variable expenses?
Money set aside for unexpected costs, ideally 3–6 months of living expenses.
What is an emergency fund?
This number determines how trustworthy you are to lenders.
What is a credit score?
Buying a small piece of ownership in a company means you are buying this.
What is a stock?
Income earned from investments such as dividends or interest is called this.
What is passive income?
The total amount of money you spend in a month is known as this.
What are total monthly expenses?
A financial plan that outlines expected income and expenses is called this.
What is a budget?
Paying only the minimum balance on your credit card results in this.
What is paying more interest / carrying debt longer?
Pooling money with other investors in a professionally managed fund is called this.
What is a mutual fund?
Wages, salaries, and bonuses are all examples of this type of income.
What is earned income?
When expenses exceed income, this is the financial result.
What is a deficit?
Automating transfers to savings accounts helps avoid this financial pitfall.
What is forgetting to save / inconsistent saving?
A debit card pulls money directly from this type of account.
What is a checking account?
This investment type represents lending money to a company or government.
What is a bond?
This type of income, often from rental property or royalties, continues even when you aren’t actively working.
What is residual income?
These expenses occur unexpectedly, like car repairs or medical bills.
What are emergency/unplanned expenses?
The opportunity cost of spending money today instead of saving is known as this.
What is the time value of money?
This report details your history of borrowing and repayment.
What is a credit report?
The principle of not putting all your money into one investment is known as this.
What is diversification?