| A | B |
|---|
| Budget | Plan for spending and saving money |
| A good budget is... | realistic |
| Gross income/Gross pay | Money you earn before taxes and other deductions are taken out |
| Net income/Net pay | The income you are left with after all taxes and deductions have been taken out |
| When it comes to savings, always pay yourself... | First! |
| Emergency fund | Should include at least three months of living expenses |
| An example of a long-term goal | I want to sail the world before I turn 60. |
| An example of a short-term goal | I want to save enough to buy a PS4. |
| Start saving... | Young/now |
| Expense | A cost to meet a need or pay a debt |
| The time value of money means... | Invest less money at a younger age and make more in the long run |
| Needs | Items necessary for survival |
| Wants | Items that might make life more comfortable or convenient, but not necessary for survival |
| Fixed | Type of expense that does not change from month to month |
| Variable | Type of expense that changes from month to month |
| An example of a fixed expense | Car payment |
| An example of a variable expense | Electric bill |
| Discretionary | Type of expense that you have complete control over; determined by your wants |
| When creating a budget, you want to... | base it on your NET income |
| Another name for net income/pay | Take home pay |
| When estimating your expenses for a budget... | overestimate what you think you will spend |
