specific, measurable financial targets that your spending plan helps you achieve, acting as the "why" behind your budget

the real, recorded money spent and earned compared to the initial financial budget

five reasons to make a budget

1. helps control finances 2. achieve goals 3. keeps you honest 4. improve habits 5. helps avoid debt and improve credit

costs that change from one period to another fluctuating based on usage, consumption, or activity levels, unlike fixed costs that stay the same. ex: groceries, dining out, gas, entertainment, personal spending

total amount someone earns from all sources before any taxes or deductions are taken away

the money left over after all expenses, costs, and taxes are subtracted from gross income

predictable, recurring costs that stay the same each month ex: rent, mortgage, car payments EASY TO BUDGET***

the ability of an investment to generate earnings that can be reinvested to earn still more earnings

the interest paid not only on the original amount deposited in the savings account, but also on all interest earned by those savings

a company is selling ownership rights. people buy the stock to become shareholders who have a right to receive a portion of the firm's profits. AKA dividend

prolonged period of falling stock prices, accompanied by widespread investor pessimism

prolonged period of rising stock prices accompanied by investor confidence

a loan in which the borrower promises to pay the lender a fixed rate of interest over the term of the loan and then repay the principal at the end of the term

used to make major purchases. often called installment loans, b/c most are paid back in monthly installments

a loan used to buy a house, ranges from 15 to 30 years old

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Economics Final

Term	Definition
budget goals	specific, measurable financial targets that your spending plan helps you achieve, acting as the "why" behind your budget
actual budget	the real, recorded money spent and earned compared to the initial financial budget
five reasons to make a budget	1. helps control finances 2. achieve goals 3. keeps you honest 4. improve habits 5. helps avoid debt and improve credit
variable expenses	costs that change from one period to another fluctuating based on usage, consumption, or activity levels, unlike fixed costs that stay the same. ex: groceries, dining out, gas, entertainment, personal spending
gross income	total amount someone earns from all sources before any taxes or deductions are taken away
net income	the money left over after all expenses, costs, and taxes are subtracted from gross income
fixed expenses	predictable, recurring costs that stay the same each month ex: rent, mortgage, car payments EASY TO BUDGET***
compounding	the ability of an investment to generate earnings that can be reinvested to earn still more earnings
compound interest	the interest paid not only on the original amount deposited in the savings account, but also on all interest earned by those savings
stocks	a company is selling ownership rights. people buy the stock to become shareholders who have a right to receive a portion of the firm's profits. AKA dividend
bear market	prolonged period of falling stock prices, accompanied by widespread investor pessimism
bull market	prolonged period of rising stock prices accompanied by investor confidence
bonds	a loan in which the borrower promises to pay the lender a fixed rate of interest over the term of the loan and then repay the principal at the end of the term
consumer loans	used to make major purchases. often called installment loans, b/c most are paid back in monthly installments
mortgage loans	a loan used to buy a house, ranges from 15 to 30 years old
the federal reserve

Created by: erinw19

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