unit 1 Flashcards
personal budget
guidline for spending your money
step 1
pay rent/mortgage, home insurance
step 2
create monthly groceries budget
step 3
pay your essential utilities (electricity, water, gas)
step 4
create your health care expenses budget
step 5
pay the minimum payment on all debts and loans not an option
step 6
pay your non essential monthly bills
step 7
create a toiletries and incidentals budget
step 8
put money into savings for emergencies (aim to have 1,000)
step 9
pay the maximum amount allowed in your 401(k) (401(k) doubles your money
step 10
pay off any debts with high interest rates
step 11
put your money into emergency fund savings acc so that you have 3-6 month’s worth of living expenses
step 12 (opt)
pay off any debts w/ moderate interest rates, between 5-10%
step 13
invest in either a traditional IRA or Roth IRA (invest 15% of ur income each month)
step 14(opt)
charity
step 15
entertainment
pay period
your statement shows the pay period for which you are
gross income
pay before deduction that will typically not be the amount of your check/ automatic deposits
net income
this is the amount you’re being paid after taxes, insurance, or other deductions have been subtracted from your gross income, and is the actual amount of your check or automatic deposit
taxes
your statement also shows what taxes the employer is required to deduct from your pay. usually includes federal income taxes and in some states, state income taxes
social security
you have to pay a social security contribution w/ each paycheck to fund your retirement
medicare
you have to pay mediocre contribution w/ each paycheck to fund your medical care after retirement
benefits
if you are a full-time employee receiving health insurance benefits you usually have to pay part of the cost of these yourself, and it’s often deducted from your pay
other deductions
sometimes other deductions may be taken from your paycheck, union dues or contributions to savings and retirement loans that you choose when you are hired
