Do Now #5: Vocab Review

Front

What is a Category in budgeting?

Back

A Category in budgeting refers to a group of similar expenses that are lumped together for easier tracking and management, such as gas, electric, and cell phone bills.

Front

What is a Variable Expense?

Back

A Variable Expense is a cost that can change from month to month, such as utility bills or groceries, as opposed to Fixed Expenses which remain constant.

Front

What happens when spending exceeds income?

Back

When spending exceeds income, it results in a Budget Deficit, meaning that expenses are greater than the available income.

Front

What is a Sinking Fund?

Back

A Sinking Fund is a savings strategy where money is set aside for a specific purpose, such as saving for a car or a vacation, to ensure that funds are available when needed.

Front

What is a Budget Surplus?

Back

A Budget Surplus occurs when income exceeds expenses, allowing for savings or investment of the extra funds.

Front

What is a Fixed Expense?

Back

A Fixed Expense is a cost that does not change from month to month, such as rent or a mortgage payment.

Front

What is the purpose of a Budget?

Back

A Budget is a financial plan that outlines expected income and expenses over a specific period, helping individuals manage their finances effectively.

Front

What is a Budget Deficit?

Back

A Budget Deficit occurs when total expenses exceed total income, indicating that a person is spending more than they earn.

Front

What is the Envelope System in budgeting?

Back

The Envelope System is a budgeting method where cash is divided into envelopes designated for specific spending categories, helping to control spending.

Front

What is a Budget Surplus used for?

Back

A Budget Surplus can be used for savings, investments, debt repayment, or future expenses.