budgeting basics

vocabulary words and definitions

income

money received for work, as a gift, or through investments

budget

a written plan for giving, saving, and spending

fixed expense

an expense that remains the same from month to month

variable expense

an expense that varies in dollar amount from month to month, but you can expect to have every month

intermittent expense

an expense that occurs at various times, throughout the year and tends to be in large, lump sums

discretionary expense

an expense for things you don’t need

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

net income

what a person earns after payroll taxes and other deductions are taken out; often referred to as take-home pay

gross income

the amount you earn before taxes and other payroll deductions

cash-flow statement

a record that summarizes all of the income and outgo over a certain period of time

irregular income

income that comes in at different amounts or at different times, or both

commission

earnings based on a percentage of the sales made