Budgeting Basics
This tool puts you in control of your spending and saving, helping you feel more confident and powerful
What is a budget?
When budgeting, these must always be met first before you decide to spend on wants.
What are needs?
This term describes the total amount of money you earn before any taxes or deductions are taken out.
What is gross pay?
This group of people (or entities) is required to pay taxes to the U.S. government.
Who is every person or company that earns income in the U.S.?
What is income?
It is a common misconception that you shouldn't spend on these at all; a good budget actually includes them after needs are met.
What are wants?
This is the amount of money you actually "take home" and should use when creating your budget.
What is net pay?
These two specific federal programs provide health coverage and are funded by taxpayer money.
What are Medicare and Medicaid?
This popular budgeting rule suggests splitting your income into different percentages.
This is the primary question used to distinguish a need from a want.
What is "Will something bad happen if I don't have this item?"
If an employee works 40 hours at a rate of $50.00 per hour, this is their "Current Total" gross pay for that period.
What is $2,000?
The federal government’s budget is divided into three "buckets": mandatory spending, discretionary spending, and this third category.
What is interest on debt?
This specific budget category includes recurring costs like rent, cell phone plans, and renters insurance.
What are Monthly Bills?
This vocabulary term describes spending on "wants" or non-essential items that you choose to buy after your needs are met.
What is discretionary spending?
This is the general term for any money taken out of your gross pay for taxes, insurance, or savings.
What are deductions?
This term describes government spending that Congress must vote on and approve each year.
What is discretionary spending?
This is the general term for any money you are spending within your budget.
What are expenses?
This vocabulary term refers to the act of ranking your expenses so that your "needs" are paid for before your "wants".
What is prioritizing (or prioritization)?
This term refers to the total amount of money earned or deducted from the beginning of the calendar year up to the current date.
What is Year-to-Date (YTD)?
This term describes government spending that is required by existing laws.
What is mandatory spending?