Income Sources
2 different incomes
Net income
Gross income
It is a good idea to break your budget down into two larger categories. What are they?
1. Fixed expenses
2. Variable expenses
What fund do most financial experts recommend
Emergency fund
Who to pay first before paying for anything else
Pay yourself first
All financial plans begin with setting goals. What goals should you set?
SMART goals
3 different ways to get paid
1. Wage
2. Salary
3. Tips
What is expense tracking
It means recording all your expenditures so you have a clear and detailed understanding of your budget.
One of the most important steps in budgeting is to create a regular plan for...
Savings
If you decide a debt management plan is right for you, your____________can help you enroll.
Credit counselor
After calculating net amount, what budgets are you left with?
Neither
Where can you earn interest income?
It can be earned from your bank accounts, such as savings accounts and certificates of deposit
Ideally, you want your net amount line to be the number...
"0"
Put your extra money into your savings category when you have a budget..
Surplus
What to do if a budget category was marked unfavorable variance
Earn less, save less, spend more
Formula for net amount
Total income – total savings – total expenses = net amount
What are sources of income
Something that provides a regular supply of money, such as employment or investments.
What happens if you don't track your expenses
If you aren't watching your expenses closely, you probably won't catch issues as soon, leaving your money at risk.
You may need to adjust your savings or expense numbers if you have a budget...
Deficit
3 disadvantages of Debt Management Plan
1. Certain Debts Are Ineligible
2. You'll Pay Fees to the Credit Counseling Agency.
3. Limited Access to Credit
5 steps to create an effective budget
1. Set goals
2. Estimate income
3. Plan for savings
4. Estimate expenses
5. Balance the budget
This extra income is sometimes called...
"Discretionary income"
One of the best ways to track expenses
Open separate bank accounts.
Four reasons why saving strategies are effective
1. Avoid wasting money
2. Sets priorities for spending
3. Keeps track of your money
4. Plan for the future
Does DMP affect your credit score?
If you're in a debt management plan, it may have an impact on your credit rating.
What is a Budget Variance?
It is the difference between what you planned on your budget and what actually happened in real life.