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MFLD MOD2
Module 2 Spending Plans & Financial Statements
| Question | Answer |
|---|---|
| A Statement of Financial Position | (similar to a net worth statement or balance sheet) a financial cash you have on hand and money in checking and savings accounts. |
| Check register system | The check register system is a control system that uses a checkbook register that is divided into spending plan categories. When a purchase is made, you place that expenditure into the column created for a given spending category. |
| Child support | Money received from a parent to help care for a child. |
| Contractual expenses | Required to pay expense for a specific amount of time—not easy to reduce. Examples(Rent, Cell phone, Cable) |
| Depository institution programs | Some depository institutions offer an on‐line spending plan or budgeting program that links to your account(s) and will automatically track your spending and show you where your money is going. |
| Envelope system | The envelope system is a strict control system that involves placing the actual budgeted amount of cash into an envelope labeled for the expense. |
| Expenses | money spent on bills that are paid on a regular basis, often monthly. |
| Gross income | the amount of wages or salary you earn before any deductions are taken out for taxes or other payroll deductions should be recorded. |
| Income and Expense Statement | lists and summarizes income and expense transactions that have taken place over a specific period of time, usually a month or year. |
| Income | money received. |
| Insurance | a product that transfers risk from an individual to an insurance company or organization. Insurance helps pay for large unexpected financial losses. |
| Interest earned | ‐Any interest from depository institution accounts earned during the time period of the Income and Expense Statement. |
| Internet‐based spending plan program | many Internet‐based spending plan programs available. Some are free and others charge a fee. The advantage of Internet‐based spending plan programs is they allow you to access your information from any device that has Internet access. Also, most of these |
| Investment assets | assets that are purchased for the purpose of making more money. |
| Investment earnings | Any money earned from investments during the time period of the Income and Expense Statement. |
| Liabilities | what is owed to others. |
| Market value | what you could realistically sell an asset for today, not what you originally paid for the asset. |
| Monetary assets | assets that can be quickly and easily converted into cash. |
| Money from others | Any money received from others, such as friends and family. |
| Money from savings and investments | Any money from savings and investments that was used to pay for expenses during the period. |
| Money management computer software | In addition to creating your spending plan for you, computer software programs may also function as a control system to tell you where your money is going. However, this may require you to keep track of your financial transactions and enter them into the |
| Mortgage | a payment to pay off the loan used to purchase a form of housing. |
| Net gain | income to be greater than expenses. |
| Net income | take home pay. |
| Net loss | expenses are greater than income |
| Net worth | the objective measure of financial wealth. |
| Non-contractual expenses | easy to reduce or eliminate. Examples(Food, entertainment) |
| Sales of assets | The amount of money earned from the sale of an asset. |
| Saving and Investing | Includes any money saved or invested for future use |
| Savings | the portion of current income not spent on consumption. |
| Scholarships/grants | Money received from scholarships and grants from non‐government sources to help pay for education. |
| Spending plan | like an income and expense statement, includes income, expenses, and net gain or net loss. A statement that describes an individual or family’s financial condition on a specified date by showing assets, liabilities, and net worth. |
| Tangible assets (also known as use or lifestyle assets) | personal property that was purchased to create a lifestyle or improve your life such as homes, automobiles, electronics, furniture, and any other personal property such as clothing, jewelry and sporting goods. |
| Wealth | a measurement of how much a person or household owns once all debts have been paid. |
Created by:
Literacy.Financial
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