Personal Finance: Chapter 3
personal financial statement
a document that provides information about an individual's current financial position and presents a summary of income and spending
insolvency
a financial state that occurs if liabilities are greater than assets
personal balance sheet
a financial statement that lists items of value owned, debts owed, and a person's net worth
consumer price index (CPI)
a measure of the changes in prices for commonly purchased goods and services in the United States
budget
a plan for using money to meet wants and needs
safe-deposit box
a small, secure storage compartment that you can rent in a bank
surplus
extra money that can be spent or saved, depending on a person's financial goals and values
assets
items of value that an individual or company owns, including cash, property, personal possessions, and investments
real estate
land and any structures that are on it, such as a house or other building, that a person or family owns
money management
planning how to get the most from your money
take-home pay
the amount of income left after taxes and other deductions are taken out of your gross pay
liabilities
the debts you owe
net worth
the difference between the amount that you own and the debts that you owe
budget variance
the difference between the budgeted amount and the actual amount that you spend
deficit
the financial situation that occurs when more money is spent than is earned or received
discretionary income
the money left after paying for the essentials, such as food, clothing, shelter, transportation, and medication
cash flow
the money that goes into and out of your wallet and bank accounts
market value
the price at which property would sell
wealth
an abundance of valuable material possessions or resources
liquid assets
cash and items that can be quickly converted to cash
income
cash inflow, or the money you receive