| A | B |
|---|
| budget | a spending and saving plan based on expected income and expenses |
| income | any money you receive--includes pay, interest, bonus |
| fixed expenses | costs that do not change from month to month—car payment or mortgage payment |
| variable expenses | costs that can vary each month in both amount and type, so you have some control over how much they’ll be—groceries |
| periodic expenses | ones you don’t pay every month and can be either fixed or variable—homeowner’s insurance that you pay every 3 months or car repair from an accident |
| PYF | “pay yourself first” which is savings and is considered the most important expense |
| assets | items of value that a person owns |
| liabilities | debts owed to others |
| net worth | Assets – Liabilities |
| depreciated value | What someone is willing to pay you for the item (not necessarily what you paid for it) |
| disposable income | Money you have left to spend or save after taxes and deductions have been paid |
| discretionary income | Money you have left to spend after taxes and all necessary expenses have been paid--"fun money" |
| cash deficit | when estimated expenses are greater than estimated income |
| cash surplus | when estimated income is greater than estimated expenses |
| financial plan | a set of goals for spending, saving, and investing the money you receive |
| wealth | an accumulation of assets |
