Budgeting Flashcards
50/20/30 rule
Put 50% to needs, 30% to wants, and 20% to savings
Auto Lease
Type of auto financing; rent a car for certain length of time and miles
Budget
Meet expected expenses with expected income
Cash envelope budget
Monthly spending money is taken out in cash
Cost of living
Amount of money needed to sustain a certain level of living
Deduction
Ítem subtracted from paycheck
Ex: SS, HI, FT and ST
Down payment
Portion of an items total coat payed at that time
Déficit
Expensed exceed income
Expenses
Ítem you pay for
Ex: rent, groceries
Fixed expense
Price that remains the same, regular intervals
Freelancer
Earns money on a per-task, per- job basis
Gig economy
Majority of people have short term jobs, rather than long term
Gross pay
Total earnings before deductions are taken
Income
Money received
Needs
Expenses that are essential
Net pay
Total earnings after payroll taxes and other deductions have been made; also called take-home pay
Pay yourself first
You save a specified amount of your paycheck doing anything with you money
Renters insurance
Form of prop. Insurance, covers losses to personal prop.
Residential lease
Contract between tent ant and landlord; terms of cost for renting prop.
Salary
Fixed amount you are paid, regardless of how many hours you worked
Surplus
Income exceeds expenses, NO money left over
Unit price
Cost of one item that can be compared to similar products, see the better deal
Utilities
Basic services to function ( water, gas, electricity )
Variable expenses
Cost appears irregularly, Change in amount
Wage
Set amount paid for every hour you work
Wants
Expenses to live more comfortable
Wealth
Measurement of assets (money saved), minus liabilities
Zero-based budget
Every anticipated earning is assigned a role, no leftover money
Depreciating asset
Loses value (car)
Appreciating asset
Increases in value (real estate)
Mortgage escrow acc.
Used to collect and pay prop. taxes and insurance payments on home.
Tax lien
Secures the government’s interest in your property when you don’t pay your tax debt.
Consider:
- term
- type of interest
- interest rate
Amortization table
Spells out what you’ll be paying each month for your mortgage. How much of principal and interest is paid over time
