9 Spending Plans Flashcards
What is a budget?
Paper or electronic document used to record both planned and actual income and expenditures over a period of time.
A budget helps in financial planning and management.
Define budget variance.
Difference between amount budgeted and actual amount spent or received.
Budget variance can indicate areas of overspending or underspending.
What is the envelope system?
Placing exact amounts into envelopes for each budgetary purpose.
This method helps in controlling spending by allocating specific amounts to various categories.
What is a revolving savings account?
Variable budgeting tool that places funds in savings to cover irregular or higher-than-usual expenses.
This account can help manage unexpected costs without disrupting the main budget.
Define subordinate budget.
Detailed listing of planned expenses within a single budgeting classification.
It allows for more granularity in financial planning.
What is a surplus?
Amount remaining after all expenses are subtracted from income.
A surplus can be used for savings, investments, or paying down debt.
What is take-home pay?
Pay received after employer withholdings for such things as taxes, insurance, and union dues, that is available for budgeting, including spending, saving, investing, and donating.
Take-home pay is crucial for personal budgeting decisions.
Fill in the blank: A _______ is the difference between amount budgeted and actual amount spent or received.
[budget variance]
True or False: The envelope system is a method that does not involve physical cash.
False
The envelope system traditionally involves cash, but it can also be adapted to digital formats.
Fill in the blank: A _______ details planned expenses within a single budgeting classification.
[subordinate budget]
What does a revolving savings account help to cover?
Irregular or higher-than-usual expenses.
This type of account can provide financial flexibility.
