Lesson 4A - Monthly Budgets and Cash Flow Vocabulary

Vocabulary and key financial formulas from Lesson 4A on monthly budgets and cash flow.

Income

Money received during a stated period.

Expense

Money spent during a stated period.

Fixed expense

A cost that is usually the same from one period to the next.

Variable expense

A cost that can change, such as food, transportation, or utilities.

Irregular expenses

A real cost paid less often than monthly, such as a semester fee or annual premium.

Budget

A plan for expected income, spending, saving, and other financial goals.

Net cash flow

Income minus expenses over the same period.

Annualizing

Converting amounts to a common yearly basis so they can be compared.

Average Monthly Amount (from Weekly)

Calculated by converting a weekly amount using $\text{weekly amount} \times \frac{52}{12}$.

Annual Amount (from Weekly)

Calculated by converting a weekly amount using $\text{weekly amount} \times 52$.