PERSONAL FINANCE CHAPTER 3 KEY TERMS

Current Liabilities

Debts that must be paid within a short time, usually less than a year

Take-Home Pay

Earnings after deductions for taxes and other items; also called disposable income

Discretionary Income

Money left over after paying for housing, food and other necessities

Balance Sheet

A financial statement that reports what an individual or a family owns and owes; also called a net worth statment

Cash Flow Satement

A financial statement that summarizes cash recipts and payments for a given period

Safe Deposit Box

A privet storage area at a financial institution with maximum security for valubles

Budget

A specific plan for spending income

Liabilities

Amounts owed to others

Money Managment

Day-to-day financial activities necessary to manage current personal economic resources while working toward long-term financial security

Cash Flow

The actual inflow and outflow of cash during a given time period

Surplus

The amount by which the actual spending is less than planned spending.

Budget Varience

The difference between the amount budgeted and the actual amount received or spent

Insolvency

The inability to pay debts when they are due because liabilities far exceed the value of assets

Assets

cash and other property with a monetary value

Income

inflows of cash to an individual or a household

Deficit

the amount by which actual spending exceeds planned spending