Income
What is Income?
Money you earn or receive from job wages, gifts, allowance, etc.
An Internet Bill is what type of expense?
A Fixed Expense
What is the last step in developing a spending plan?
Evaluate and adjust your spending plan
What percentage of your income is recommended for the savings category?
10%
______-______= Net Gain or Net Loss
Income-Expenses=Net Gain or Net Loss
What is Net Income?
Your take home pay (amount of the paycheck after taxes are taken out)
What are Taxes?
Required citizen charges by local, state and federal governments used to provide public goods and services.
What does 50-30-20 represent?
50% of your income on needs
30% of your income on wants
20% of your income in savings
What percentage of your income is recommended for the housing category?
30%
In regards to spending SMART goals, How do you make a goal measurable?
Write the exact dollar amount
Name three examples of needs, and three examples of wants
Needs: Food, Clothes, Shelter
Wants: Lattes, Gym memberships, Eating Out
(Many more examples available)
List two mandatory payroll deductions
Federal
State
Federal Insurance Contribution Act (FICA)
What is the Envelope System
Individuals place the actual budget amount of cash from a paycheck into a specific Envelope
What percentage of your income is recommended for insurance?
7% of your income
What is the equation for net worth?
_____-_____=Net Worth
Assets - Liabilities = Net Worth
What is the largest of the four major expenditures.
Housing
List three types of insurance
Health, Vision, Disability, Dental, Life
Each individual has a unique spending plan based upon what 3 elements?
Their Wants, Needs, and Values
When calculating spending plan expense categories, should you use gross or net pay?
Net Pay--- Taxes are taken out
What is Value?
A fundamental belief or practice about what is desirable, worthwhile, and important to and individual.
Which is more important: Income or Net Worth
Net Worth- What you have matters more-- even with a high income, you could have a lot of expenses that bring your net worth down.
Envelope System and Check register system help...
Name 3 spending plan control system methods
The Envelope System
Check Register System
Electronic Spending Plan System
50-30-20
You should track your spending using a spending plan for what period of time?
One month
What is stage three of the Financial Life Cycle?
Wealth Distribution