2.1
What is a Budget?
A written plan for giving, saving, and spending
What are the four parts of a budget?
income, giving, spending, saving
How much of your gross income should you budget to invest in retirement?
15%
What is a Cash Flow Statement?
a record that summarizes all of the income and outgo (spending) over a certain time period
Which was does money flow?
In and out
What is a fixed expense?
an expense that stays the same from month to month
What are the five foundations?
First, save $500 dollars for emergency fund. Second, get out and stay out of debt. Third, pay cash for your car. Fourth, pay cash for college. And lastly, build wealth and give.
What is the hardest part of tracking your expenses?
Keeping a habit
What is the percentage of Americans who actually budget vs the ones who think its important?
35% of Americans actually budget while 95% say its important
Besides a budget helping you make good decisions are saving and spending, what else does it help with?
A budget also helps you with being generous with your money.
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 is the percent of millionaires who stick to their budgets?
93%
What is Personal Finance?
20% head knowledge and 80% behavior
Discretionary Expense
expense for things you dont need
What is gross income?
the amount you earn before taxes and other payroll deductions
What are cash flow statements mostly used in?
Business
What does a god budget do?
A good budget also breaks down your income and spending into specific categories so you know exactly where your money comes from and where you plan to spend it.
How much money should you said aside from your income to give to others?
10%
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 the second half to successful budgeting?
Tracking expenses