Unit 2 Flashcards
Fixed Expenses
Costs that do not change from month to month
Variable Expenses
expenses that change from month to month depending on a variety of factors.
Periodic Expenses
arise occasionally during the year, usually less than once a month
SMART Goals
Specific: State exactly what is to be done
Measurable: Include how the goal can be measured—how much?
Actions: Determine steps to reach the goal
Realistic: Set goals that can be met
Timeframe: State when the goal will be completed
Net Income
(gross pay-taxes)
Budget
Net income - Expected Expenses
Budget deficit
A situation where there is not enough money to cover expenses
Balanced Budget
A situation where income and expenses are equal
Budget Surplus
A situation where money is left over after all obligations have been paid
Comparison Shop
Checking several alternatives to find the best product at the best price
Disposable Income
The money you have to spend or save as you wish after taxes, social
security, and other required and optional deductions have been withheld from your gross pay
Emergency Fund
An amount of money set aside to cover bills in case of emergency
Investing
The process of setting money aside to increase wealth over time and accumulate
funds for long-term financial goals such as retirement.
Pay yourself first
The concept of putting aside a sum of money into savings each month
before paying other bills
Why we spend
To give us personal satisfaction
