Balancing Act
An item of value that an individual or company owns
Asset
the money that actually goes into and out of your wallet and bank accounts
Cash flow
A plan for using money to meet wants and needs
A budget
Compares your liabilities to your net worth
Debt ratio
A financial state that occurs if liabilities are greater than assets
Insolvency
A financial statement that list items of value owned, debts owed, and person's net worth
Personal balance sheet
The amounts of income left after paying taxes and other deductions
Take home pay
A place to put aside a little money. Experts recommend saving 3 to months worth of living expenses for this purpose
an Emergency fund
Indicates the number of months you would be able to pay your expenses in case of an emergency
Liquidity ratio
For a balance sheet, this term refers to the difference between assets and liabilities
Net worth
Cash and items that can be quickly converted to cash
Liquid assets
the money left over after paying for the essentials such as food, clothing, and shelter
Discretionary income
This is a measure of the changes for commonly purchased goods and services in the U.S.
consumer price index (CPI)
Indicates how much of a person's earnings goes to debt payments
Debt-payments ratio
Extra money that can be spent, depending on a person's financial goals and values
a Surplus
Any other valuable belongings that are not real estate would be found in this category on a balance sheet
Personal possessions
the Total of your fixed and variables expenses
Cash outflow
the difference between the budgeted amount and the actual amount that you spend
budget variance
this is the amount saved each month divided by gross monthly income
Savings ratio
the money you receive
income
Debts that you owe
Liabilities
A financial situation that occurs when more money is spent than is earned or received
Deficit
This is a deduction taken out of your paycheck and put into an bank account
Payroll savings
this equation represents the difference between your income and expenses
net cash flow
an abundance of valuable material possessions or resources
Wealth