Budgeting Flashcardzzzzzzzzzzzz

Front

What is gross pay?

Back

Gross pay is the total amount of money earned by an employee before any deductions such as taxes, Social Security, and Medicare.

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What is net pay?

Back

Net pay is the amount of money an employee takes home after all deductions have been made from their gross pay.

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What are expenses?

Back

Expenses are the costs incurred by an individual for goods and services, such as rent, food, and entertainment.

Front

What is the difference between gross income and net income?

Back

Gross income is the total earnings before deductions, while net income is the earnings after deductions.

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What are wants in budgeting?

Back

Wants are non-essential items or services that individuals desire but do not need for basic survival.

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What are needs in budgeting?

Back

Needs are essential items or services required for basic survival, such as food, shelter, and clothing.

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How do you calculate net income?

Back

Net income is calculated by subtracting total deductions (taxes, Social Security, etc.) from gross income.

Front

What is a budget?

Back

A budget is a financial plan that outlines expected income and expenses over a specific period.

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What is the purpose of budgeting?

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The purpose of budgeting is to manage finances effectively, ensuring that income covers expenses and savings goals are met.

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What is discretionary spending?

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Discretionary spending refers to non-essential expenses that can be adjusted or eliminated, such as dining out or entertainment.