Personal Financial Statements Vocabulary

budget

A plan for using money to meet wants and needs.

liabilities

Amounts of money owed to others (debts, bills). Liabilities includes only money that you will owe for longer than a month -- example: a phone bill is NOT considered a liability.

wealth

An abundance of material possessions and resources.

surplus

An amount of money remaining after all expenses have been met. Very much like discretionary income.

assets

Anything of value that is owned (cash, property, personal possessions, investments)

personal financial statement

A document that provides information about an individual's current financial position and presents a summary of income and spending.

income

Any money you receive.

personal possessions

Cars and any other valuable belongings that are not real estate.

current liabilities

Debt that needs to be paid off in a year or less.

long term liabilities

Debts that will not be paid off within a year (cars, student loan, mortgage loans.

net worth

Difference between the amount you own & debts you owe

real estate

Land and any buildings on it.

discretionary income

Money left after all bills are paid and necessary items are bought (like food, clothing, shelter).

cash flow

Money that goes in and out of your wallet and bank accounts.

market value

The price at which a property would sell.

deficit

When more money is spent than is earned or received. When your checking account is in deficit the bank calls this "insufficient funds".

liquid assets

cash or items that can be quickly converted to cash

personal balance sheet

(also called a net worth statement) is a financial statement that lists items of value owned, debts owed, and a person's net worth.

insolvency

A financial state that occurs if liabilities are greater than assets.

take-home pay

also called net pay, is a person's earnings after taxes and other items such as insurance and savings are deducted from the paycheck.