| A | B |
|---|
| money management | refers to the day-to-day financial activities associated with using limited income to staify your unlimited needs and wants. |
| personal assets | items of value |
| net worth | the difference between a person's assets and liabilities is your net worth. |
| cash flow statement | reports net wages and other income along with spending for a period, such as for a month. |
| fixed expenses | costs that occur on a regular basis and are the same amount each time. |
| variable expenses | involve living costs that differ each time and may not be as easy to estimate. |
| allowance | the amount of money you plan to use for a certain budget category. |
| budget variance | a difference between the actual spending and the budgeted amount. |
| tax | a charge imposed by a government to finance public services. |
| earned income | results from wages, salary, commission, fees, trips, and bonuses. |
| investment income | the result of earnings from dividends, interest, and rent. |
| tax deduction | an amount that reduces taxable income. |
| exemption | a tax deduction for the taxpayer, a spouse, and each dependent. |
| taxable income | the amount on which taxes are calculated. |
| tax credit | an amount subtracted directly from taxes owed. |
| financial plan | a report that summarizes your current financial condition, acknowledges your financial needs, and sets a direction for your future financial activities. |
| individual retirement account (IRA) | a tax-sheltered retirement plan in which people can annually invest earnings up to a certain amount. |
| estate planning | involves the accumulation and management of property during one's lifetime and the distribution of one's property at death. |
