Gross Pay

Income earned before payroll deductions

Net Pay

Income earned after payroll deductions

FICA

Medicare and Social Security

Payroll deductions

Federal Income tax, State Income Tax, 401 K

Variable Expense

expenses that can change month to month

* Entertainment expenses
* Medical Bills
* Credit Card Expenses

Fixed Expenses

Expenses that stay the same month to month

* Automobile Loan
* Student Loan

Asset

* Joe DiMaggio Rookie baseball card
* Real Estate

Liquid Asset

* Checking Account
* Cash

Current Liability

* you owe a friend $20
* Medical Bill
* Credit Card Balance

Long Term Liability

* Mortgage
* Car Loan

Insolvency

Occurs when liabilities are greater than assets

Net worth

 Total Assets - Total Liabilities

Net Cash Flow

 Inflows - Outflows

Monthly Net Income

 Monthly Gross Income - Payroll deductions