Chapter 8.1 Vocab

Question 1

Disposable income

Answer 1

The money you have left to spend or save after taxes and other required deductions are taken

Question 2

Cash surplus

Answer 2

When income exceeds expenses after estimating both; the cash that remains

Question 3

Budget

Answer 3

A spending and saving plan based on your expected income and expenses. Money coming in mist equal money going out.

Question 4

Assets

Answer 4

Items of value that a person owes

Question 5

Liabilities

Answer 5

Money or debts you owe to others

Question 6

Net worth

Answer 6

Shows a persons net worth based on his or her assets and liabilities

Question 7

Fixed expenses

Answer 7

Costs that do not change from month to month

Question 8

Variable expenses

Answer 8

Costs that vary in amount and type, depending on the choices you make

Question 9

Solvent

Answer 9

Assets are greater than liabilities and the person is in a favorable financial position

Question 10

Personal property inventory

Answer 10

A list of valuable items you own along with the purchase proscribed and approximate current value

Question 11

Financial plan

Answer 11

A set of goals for spending, saving, and investing the money you receive.