SPF Budgeting Vocab.

Budget

a plan where you account for all of your expenses in a given period of time

Spending “needs”

necessities, things you must have, essential to your health and security

Spending “wants”

something you don’t really need but is nice to have, you can get by without them

“Paying yourself first”

50-30-20 rule

50% on fixed expenses, 30% fun stuff, 20% for savings

Spending habits

how you define your personal needs versus your personal wants, how you usually spend your money

Impulse buying

making purchases without planning to do so

Gross income

your total salary before deductions

Net income

how much of your salary you have left after deductions

Deductions

money taken out of your paycheck, sometimes wanted mostly taxes

Withholdings

money that is withheld from your paycheck

IRS

International Revenue Service, they collect taxes

W-4

a form that states the amount of money that will be withheld from your paycheck

Social security

a federal insurance program that provides certain people with benefits

Medicare

federal health insurance given to certain people

Income tax

a tax that is put on everyones income to help the government make money

Flat tax

everyone gets charged the same rate regardless of their income

Progressive tax

the tax rate increases as the taxable amount increases

W-2

a form where you see how much you earned and paid in taxes, there is one for every job

1040

a form that helps you to know if you owe more money to the IRS or if you need a refund

Minimum wage

the minimum amount your boss or employer can pay you per hour

Livable wage

the minimal level of income necessary to pay for basic living costs

Variable expenses

regular expenses that vary from month to month

Fixed expenses

regualar expenses that don’t change from month to month

Periodic expenses

expenses that are predictable but not regular every month