| A | B |
|---|
| Savings are | more liquid than investments |
| Planning a budget to not have to borrow | represents being financially independent |
| Assets | motorcyces, checking acct |
| To determine net worth | prepare a balance sheet |
| monthly earnings and spending | income and expense statement |
| different between assets & liabilities | represents net worth |
| liabilities | mortgage, car loan |
| wages | income |
| sold 4-wheeler | ex. of income |
| household bills | expenses |
| life insurance premiums | ex. of an expense |
| $400 gift | type of income |
| rent | living expense |
| income more than expenses | net gain |
| income less than expenses | net loss |
| 1st decide type of spending plan | next, make realistic estimates of income and expenses |
| important step in spending plan | set smart financial goals |
| ran out of money before paying rent | review/revise financial goals |
| Brent uses envelope system for income and expenses | he needs to determine how well his spending plan turned out |
