Budgeting

50/30/20 Budget

A budgeting method that allocates 50% to needs, 30% to wants, and 20% to savings and debt repayment

Zero-Based Budget

A budgeting method where every anticipated earning is assigned a role to be spent, saved, or invested somewhere, so there's no "leftover" money with no purpose

Cash Envelope Budget

A budgeting method where money for monthly spending is taken out in cash and placed in labeled envelopes according to budget categories. Spending occurs only from the corresponding envelopes.

Residential Lease

A contract between a tenant and a landlord providing the terms and costs for renting the property

Variable Expense

A cost that appears irregularly or that changes in amount (e.g., utility bills)

Fixed Expense

A cost that can be expected at regular intervals and that remains the same amount (e.g., monthly rent payment)

Salary

A fixed amount that you are paid over a period of time, regardless of how many hours you work

Renters Insurance

A form of property insurance that covers losses to personal property and protects the insured person from liability claims

Wealth

A measurement of your assets (money you've saved or things of value you own) minus your liabilities (money you owe others); also called net worth

Budget

A plan of your expected income and how you will use it to meet your expected expenses over a period of time

Down Payment

A portion of the total cost of an item, such as a car or house, that must be paid at the time of purchase. The buyer will often take out a loan to finance the remaining balance.

Wage

A set amount you are paid for every hour that you work; also called hourly pay

Pay Yourself First

A strategy where you save a specified amount of your paycheck before doing anything with the rest of your money

Deduction

Any items subtracted from your paycheck, including state and federal income taxes, Social Security, health insurance or 401(k) contributions

Public Transportation

Buses, trains, subways, and other forms of transportation that charge set fares, run on fixed routes, and are available to the public.

Needs

Expenses that are essential for you to be able to live and function

Wants

Expenses that help you live more comfortably

Fixed Income

Income that remains the same from week to week or month to month

Variable Income

Income that varies from week to week or month to month

Expenses

Items or services you pay for such as rent, groceries, entertainment, bills, etc.

Income

Money that is received from work, investments, business, etc.

Low income

Not having or earning much money

Cost of Living

The amount of money needed to sustain a certain level of living, including basic expenses such as housing, food, taxes, and healthcare; often used when comparing how expensive it is to live in one city versus another

Utilities

The basic services your home, apartment, or business needs to keep it comfortable and functioning properly (e.g. water, electricity, etc.)

Unit Price

The cost for one item or measurement that allows it to be easily compared to other similar products to evaluate which is a better deal

Living Wage

The lowest income necessary for a worker to meet their basic needs

Net Pay

Total earnings after payroll taxes and other deductions have been taken out; also called take-home pay

Gross Pay

Total earnings before any deductions are taken

Deficit

When your expenses exceed your income

Surplus

When your income exceeds your expenses and you have money leftover