Chapter 2: Budgeting Basics
Discretionary Expense
(Non-essential) Expense for things you don't need
plan
A budget is a ________ for your money.
perfect
A budget is never going to be a _______ process.
Zero-Based Budget
A cash-flow plan that assigns an expense to every dollar of your income; the goal is for the total income minus the total expenses to equal zero
Cash-Flow Statement
A record that summarizes all of the income and outgo (spending) over a certain time period
Envelope System
A way to track exactly how much money you have in each budget category for the month by keeping your cash tucked away in envelopes
Budget
A written plan for giving, saving, and spending
checking
A zero-based budget does NOT mean zero dollars in your _______ account.
zero
A zero-based budget is when your income minus your giving, saving, and spending equals _______.
track
After you make a budget, you need to _______ every expense.
friend
Ask a parent or _______ to help keep you accountable with your budget.
honest
Be _______ with yourself about your spender or saver tendencies.
punch
Don't underestimate the emotional _______ you get when using cash.
Commission
Earnings based on a percentage of the sales made
Examples of discretionary expenses
Eating out, gaming or streaming subscriptions, movies
Intermittent Expense
Expense that occurs at various times throughout the year and tends to be in large, lump sums
Fixed Expense
Expense that remains the same month to month
Variable Expense
Expense that varies in dollar amount from month to month, but that you can expect to have every month
generous
Find creative ways to be _______ with your time and money.
three
Give your budget _______ months to start working.
Money flows out in three ways
Giving, Saving and Spending
miscellaneous
In your budget, make sure you have a(n) _______ category.
Irregular Income
Income that comes in at different amounts or at different times, or both
Importance of a Budget
It gives you control of your money and sets you up for financial success in the future
adjust
Keeping track of your expenses will help you _______ your budget.
flows
Money _______ in two ways: in and out.
Income
Money received for work, as a gift, or through investments
Deductions
Money subtracted from your paycheck
Examples of intermittent expenses
New tires, car insurance premium, vet bills
35%
Only _______ of people do a budget every month.
Withholding
Portion of an employee's salary that is not included in their paycheck
Four Walls
Prioritize your _______: shelter, utilities, transportation, and food.
Examples of fixed expenses
Rent/mortgage payment, phone/internet, car payment
Gross Income
The amount you earn before taxes and other payroll deductions
zero-based
The best kind of budget is a _______ budget.
income
The first component of a budget is _______.
disaster
The first month you do your budget will be a _______, and that's ok!
spending
The fourth component of a budget is _______.
giving
The second component of a budget is _______.
saving
The third component of a budget is _______.
Income, Savings, and Giving
These can also have categories!
Examples of variable expenses
Utilities, groceries, gas
Net Income
What a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay
faster
When budgeting becomes a habit in your life, it will become easier and _______.
categories
When you budget, the way you break up your _______ is up to you.
month
You need to do a budget every single _______.
personality
You will be inclined to budget one way or another way based on your money _______.
freedom
Your budget gives you _______ to spend.
different
Your budget will be _______ every month.
95%
_______ of people agree that budgeting is important.
share
_______ your budget with someone you trust.
