Budgets and Net Worth

Front

What is a Variable Expense?

Back

A Variable Expense is a cost that can change from month to month, such as going to the movies or eating out.

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What is a Fixed Expense?

Back

A Fixed Expense is a cost that remains the same each month, such as a car payment or rent.

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How do you calculate Net Worth?

Back

Net Worth is calculated by subtracting total liabilities from total assets. Formula: Net Worth = Total Assets - Total Liabilities.

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What is a Liability?

Back

A Liability is a financial obligation or debt that an individual owes to another party, such as a mortgage or credit card debt.

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What is an Asset?

Back

An Asset is anything of value or a resource owned by an individual, such as cash, property, or investments.

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Example of a Variable Expense:

Back

Eating out is an example of a Variable Expense because the amount spent can vary each month.

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Example of a Fixed Expense:

Back

A car payment is an example of a Fixed Expense because the amount remains constant each month.

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If Jin's total assets are $8,794 and her liabilities are $2,670 + $3,622, what is her net worth?

Back

Jin's net worth is $2,502.

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What is the difference between Assets and Liabilities?

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Assets are what you own, while Liabilities are what you owe.

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What is a Mortgage?

Back

A Mortgage is a type of loan specifically used to purchase real estate, which is considered a liability.