BUDGET BASICS
Expenses that improve your lifestyle but are not essential to meet obligations.
This type of fund is designed to cover unexpected expenses such as car repairs or medical bills.
Emergency fund
Is the amount of money you earn
before anything is taken out for taxes
Gross Income
The process of paying back money that has been borrowed.
Debt Repayment
Expenses required to live, work, and meet basic responsibilities.
Needs
If you save $100 every month for a year, how much will you have saved
1,200
is the amount of money you earn
after all taxes are taken out of your pay.
Net Income
This is the amount charged by a lender for borrowing money.
Interest
Rent, utilities, and insurance are examples of this type of expense that usually stays the same each month.
Fixed expenses
Taking the time to do this before making a large purchase helps prevent impulse buying and ensures you find the best value.
Comparison Shopping
This financial goal can be accomplished in few months up to 2 years
Short-term financial goal
This debt repayment strategy focuses on paying off the smallest balance first while making minimum payments on all other debts.
Snow Ball Method
Expenses that change from month to month based on your usage habits and choices
Variable Expenses
Transfer you set up daily/weekly/monthly to your savings account as a good savings habit
Automatic Transfer
Buying a car in 2 to 5 years is an example of
Medium-term financial goal
This debt strategy focuses on paying first the debt with the highest interest rate while making minimum payments on all other debts.
Avalanche Method
What does the 50/30/20 rule consist of?
50% for needs, 30% for wants, and 20% for savings and debt repayment
Buying a home or pay off college is an example of a
Long-term financial goal