Budgeting and Consumer Protection Vocabulary

Budget

A plan for how you will spend and save your money

Income

Money you receive earn

Expenses

Money you spend on goods or services

Fixed expenses

Costs that stay roughly the same each month

Variable Expenses

Costs that can change from month to month

Needs

Essential items required for survival and basic living

Wants

Non-essential items that you’d like to have but don’t need for survival

Savings

Money set aside for future use, emergencies, or specific goals

Savings goal

A specific amount of money you plan to save for a particular purpose

Debt

Money owed to someone else

Interest (on debt)

Interest: the cost of borrowing money, usually a percentage of amount borrowed

Interest (on savings)

Money earned from keeping your funds in a bank account or investment

Gross Pay

Total earnings before any deductions are taken out

Net pay

Gross pay minus all deductions; the actual amount of your paycheck

Deficit

When your expenses are greater than your income

Surplus

When your income is greater than your expenses, leaving money available for savings or other goods

Emergency fund

Money saved specifically for unexpected expenses

Opportunity cost

The value of the next best alternative you give up when you make a choice

Financial literacy

The knowledge and skills to manage financial resources effectively for a lifetime of financial well-being

Credit

Borrowing money with the promise to pay it back later, often with interest

Credit Score

A number that represents your creditworthiness

Impulse buying

Purchasing something on the spur of the moment without prior planning

Pay yourself first

Prioritizing saving by putting a portion of your income into savings before paying other expenses

Assets

Items of value that a person owns

Liabilities

Money or debt owed to others

Net worth

Assets minus liabilities

Consumer Product Safety Commission

Responsible for creating and enforcing standard for safety for products such as toys and clothing

Food and Drug Administration

Responsible for safety of processed food, drugs, medical devices, and cosmetics

Federal Trade Commission

Responsible for making sure advertising and labels are not false or misleading

Better Business Bureau

A nonprofit organization that investigates, keeps records and seeks to assist in the resolution of consumer complaints against businesses