Personal Finance Chapter 3 Vocab

discretionary income

the money left over after paying for the essentials

liabilities

the debts you owe

personal financial statement

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

budget

a plan for using money to meet wants and needs

safe-deposit box

a small, secure storage compartment that you can rent in a bank

surplus

extra money that can be spent or saved

insolvency

financial state that occurs if liabilities are greater than assets

personal balance sheet

financial statement that list items of value owned, debts owed, and a person's net worth

real estate

land and any structures that are on it that a person owns

cash flow

money that goes into and out of your wallet and bank account

income

money you receive from a job, allowance, interest earned in your savings account

money management

planning how to get the most from your money

market value

price at which property would sell

net pay

the amount of income left after taxes and other deductions are taken out of your gross pay

net worth

the difference between the amount that you own and the debts that you owe

budget variance

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

deficit

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

wealth

an abundance of valuable material possessions or resources

assets

any items of value that an individual or company owns, including cash, property, personal possessions, and investments

liquid assets

cash and items that can be quickly converted to cash

consumer price index

changes in prices for commonly purchased goods and services in the United States