Personal Finance Chapter 3

personal financial statement

a document that provides info about an individuals current financial status and presents a summary of the income

insolvency

a financial state that occurs if liabilities are greater than assetts

Consumer Price Index (CPI)

a measure of the changes in prices for commonly purchased goods and services in the US

Budget

a plan for using money to meet wants and needs

safe-deposit box

a small secure storage compartment usually for $100 a year or less

Surplus

extra money that can be spent or saved, depending on a person's financial goals and values

real estate

land and any structures that are on it 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 that you owe

Budget Variance

the difference between the budgeted amount and the actual amount that you spend

net worth

the difference between the debts you owe and the money you own

Deficit

the financial situation that occurs when more money is spent than is earned or received

Discretionary Income

the money left over after paying for the essentials-food, shelter, clothing, transportation, and medication

Cash Flow

the money that actually goes into and out of your wallet and bank accounts

income

the money you receive

market value

the price at which property would sell

personal balance sheet

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

wealth

an abundance of valuable material possessions or resources

assets

any items of value that an individual or company owns;cash, property, etc

liquid assets

cash and items that can be quickly converted