Chapter 2 Key Terms

Question 1

written cash flow plan; assigns every dollar to a specific category/expense at the beginning of each month

Answer 1

budget

Question 2

a copy of each check you write; the check has a piece of carbon paper underneath that duplicates it

Answer 2

carbon check

Question 3

series of envelopes that are divided into categories (food, entertainment, gas, etc.) and are used to store cash for planned monthly expenses

Answer 3

envelope system

Question 4

an item that is bought without your consideration of the long-term effects

Answer 4

impulse purchase

Question 5

to match your bank statement with your checkbook, preferably within 72 hours of receiving the statement

Answer 5

reconcile

Question 6

cash flow plan that assigns an expense to every dollar of your income, wherein the total income minus the total expenses equals zero

Answer 6

zero-based budget