| the steps in preparing a practical budget in order | Set financial goals, Estimate your income, budget for unexpected expenses, Budget for fixed expenses, budget for variable expenses, Record what you spend, review spending or saving patterns, |
| Consumer price index | a measure of the changes in prices for commonly purchased goods and services in the United States. |
| Personal financial statement | a document that provides information about an individual’s current financial position and presents a summary of income and spending. |
| Net worth | the difference between the amount that you own and the debts that you owe. |
| liquid assets | cash and items that can be quickly converted to cash |
| liabilities | Debts that you owe |
| cash flow | The money that actually goes into and out of your wallet and bank accounts. |
| budget | Plan for using money to meet wants and needs. |
| budget variance | the difference between the budgeted amount and the actual amount that you spend. |
| insolvency | financial state that occurs if liabilities are greater than assets. |
| money management | Planning how to get the most from your money. |
| safe deposit box | A small, secure compartment that you can rent in a bank, usually for $100 a year or less. |
| Personal balance sheet | a financial statement that lists items of value owned, debts owed, and a person’s net worth. |
| assets | any items of value that an individual or company owns, including cash, property, personal possessions, and investments |
| Wealth | an abundance of valuable material possessions or resources. |
| real estate | land and any structures that are on it, such as a house or any other building that a person or family owns. |
| market value | The price at which property would sell. |
| income | The money that you receive |
| Discretionary income | the money left over after paying for the essentials, such as food, clothing, shelter, transportation, and medication. |
| Take home pay | the amount of income left after taxes and other deductions are taken out of your gross pay. |
| surplus | extra money that can be spent or saved, depending on a person’s financial goals and values. |
| Deficit | the financial situation that occurs when more money is spent than is earned or received. |
