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PF Ch 7: Budgeting
Vocabulary terms from Chapter 7
Term | Definition |
---|---|
Budget | cash flow plan; assigns every dollar to a specific category/expense at the beginning of each month. |
Discipline | self-control used in directing behavior; the key to wealth building is being consistent over time. |
Envelope System | series of envelopes, divided into pre-determined categories, used to store cash for planned monthly expenses; self-imposed discipline tool to assist people in managing their monthly finances; possible categories include food, entertainment, gas, etc |
Impulse Purchase | To buy an item without thinking about it |
Reconcile | to match your bank statement with your checkbook, preferably within 72 hours of receiving the statement |
Zero-Based Budget | cash flow plan that assigns an expense to every dollar of one’s income, wherein the total income minus the total expenses equals zero |