Show Me the Money
A plan detailing one’s cash flows (income and expenses)
Budget
Cumulative value on all the things that you own.
Assets
A budgetary scenario where, after accounting for all expenses, there is income left over.
Budget Surplus
Beliefs and principles one considers important, correct, and desirable.
Value
The value of other alternatives that are foregone when
making a decision.
Implicit Cost
The cost required to buy something.
Expense
The amount of one’s net pay that is left over after paying for the essentials, such as; food, clothing, shelter, transportation, and medication, to be used however one sees fit, either to spend on more wants or to save.
Discretionary Income
A budget that includes expenses that equal the amount of income that is available to pay for them (no more money needed, but no money left over for other purposes).
Balanced Budget
Goods and services that add pleasure to one’s life, but are not necessary for survival (e.g., better computer, sports car, dance school, vacation, concert tickets, etc.).
Wants
Situation created by limited resources which require compromises to meet basic needs and additional wants.
Scarcity
Keeping track of income coming in, all living expenses, and creating a plan for the future use of money, which includes savings and investments.
Money Management
Expenses that generally do not change in value from month-to-month (e.g., apartment rent, car payment, health insurance, etc.).
Fixed Expenses
Anything that money is still owed for
Liabilities
The degree of wealth and material comfort which a person has available to them.
Standard of Living
Costs that require a money payment. Example: paying for a concert ticket.
Explicit Cost
The concept of money coming in (income) and going out (expenses).
Cash Flow
Expenses one does not have control over (e.g., taxes, loan payments, insurance, etc.).
Non-Discretionary Income
A budgetary scenario where there is an insufficient amount of income, therefore all expenses are not paid.
Budget Deficit
Goods and services that an individual must have to survive (e.g., food, clothing, shelter, etc.).
Needs
Cost of an action is what you must give up when you make that choice. Another way to say this is: it is the value of the next best opportunity.
Opportunity Cost
Expenses that vary in value from month-to-month (e.g., utility bills, food, automobile gasoline, etc.), or vary in their rate of occurrence (e.g., vacation, flat tire, oil change, concert ticket, etc.).
Variable Expenses
Money set aside, or budgeted, for unanticipated necessary expenses (i.e., if one gets sick/injured, loss of a job, car breaks down, etc.).
Emergency Fund
A difference between a predicted budgetary income or expense value and the actually experienced income or expense value.
Budget Variance
Situation where the sacrifice of something is needed to obtain another.
Trade-Off
A person’s overall wealth, after determining the difference in value between their assets and liabilities.
Net Worth