Lesson 8: Budgeting

the money you have left to spend after taxes have been paid

• Budget

• Disposable Income

• Gross Pay

• Financial Expenses

A set of goals for spending, saving, and investing your money

• Financial Plan

• Disposable Income

• Savings Plan

• Fixed Expense

a spending and savings plan based upon income and expenses

• Disposable Income

• Financial Plan

• Budget

• Variable Expenses

If income is greater than expenses, you will have a(n)

• deficit

• variable expense

• fixed expense

• surplus

In the 50/30/20 budget plan, the 20 represents...

• 20% of your net income should be spent on needs

• 20% of your net income should be spent on wants

• 20% of your net income should be spent on savings/investments

• $20 should be put into a savings account every week

Personal and Financial Records are important because

• They show that you are responsible

• They may be required as proof in a tax audit or legal proceedings

• It leads to a hoarder mentality

• None of the above

An example of a record that you should keep for at least 5 years...

• Tax Returns (1040, W2, deductible expenses, etc.)

• Paycheck stubs

• Grocery receipts

• Electronic equipment receipts

Assets are

• Things you own that have value

• Things that you owe (loans, bills, etc)

• Solvent items

• Insolvent Items

Net Worth equals...

• Assets - Net Worth

• Liabilities - Net Worth

• Assets + Liabilities

• Assets - Liabilities

If your Assets are greater than your Liabilities, you are considered...

• Solvent

• Insolvent

• Popular

• Rich