gov and ec ch 2 study guide (everybody say ty em)

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27 Terms
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percentage of Americans that use a budget
components of successful budgeting
income, giving, saving spending
the four walls and their priority in your budget
1. food 2. utilities 3. shelter 4. transportation
how often should you create a budget
every month
what does a budget show you
how much you plan to spend/ are preparing to spend in the future
how does a budget benefit you
pay raise, save more, less stress
budget vs cash flow statement
a budget shows what will happen, a cash flow shows what already happened
how many months does it usually take for your budget to start working as it should
3 months
what does your personality affect
your personal values
percentage of Americans stressed about personal debt
types of expenses and examples of each
fixed - rent/morgage variable - grocery, gas intermittent - oil change discretionary - subscriptions
define net income
money you bring home post taxes
why is tracking your expenses monthly important
what types of money counts as income
any money you earn or save during the month
how can you stay accountable to reach your financial goals
by telling a trusted friend/family member/advisor your money goals and they can help keep you in check
budgeting = freedom because it gives you the _____ to _____
permission; spend
first priority in budgeting
what to do if you overspend in a category in your budget
take money from another category and adjust accordingly
earnings based on a percentage of the sales made
how do you know if you're creating a realistic budget
if you look at previous expenses and compare them or you can see if the budget was accurate at the end of the month
what's the best way to budget
do what's easiest for you
envelope system
putting cash in diff envelopes for various expenses per week or month
describe irregular income and give examples
income that comes in at diff times/amounts (babysitting, mowing the lawn)
what makes it a zero-based budget
you give every single dollar you own an assigned name
how would you adjust your budget to not overspend when there's an unexpected expense
take money from another category
how do cash flow statements work? how do they benefit you?
how can cash-flow help you budget for the next month
it counts as a record for past expenses/it'll show you later down the line what kind of budgeting worked or didn't work for you