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Personal Budget
Term | Definition |
---|---|
Budget | Detailed summary of the expected income and expenses for a defined period of time |
Budgeting | Process of creating a plan to spend and save money |
Assets | Belongings which have value |
Liabilities | Expenses and outstanding debt |
Short Term Goals | Goals set to be achieved in less than a year of time |
Long Term Goals | Goals set to be achieved in 10 years time |
Needs | Expenses which are necessary to live and function |
Wants | Expenses which help an individual to live more comfortably |
Fixed Expesnes | Expenses that are the same month to month |
Variable Expenses | Expenses that change over time |
Cost | Price you pay for a good/service |
Interest | Money charged for the use of money |
Benefits | An advantage or something that helps you |
Credit/Credit Cards | The ability to buy goods/services now but pay for them later |
Mortgage | Credit used to purchase a home/land |
Investing | Using money now to make money later |
Debt | Money owed |
Income | Any money earned or received (wages or gifts) |
Insurance | A means of guaranteeing financial protection against various risks |
Saving | Setting aside a portion of current income for future use |