Budgeting Glossary
10 essential terms — because precise language is the foundation of clear thinking in Budgeting.
Showing 10 of 10 terms
The amount of money you receive after all taxes have been deducted from your paycheck, also called take-home pay or net income.
A written plan that outlines expected income and planned expenses over a specific period, used to manage and control spending.
The total amount of money coming in (income) and going out (expenses) during a specific time period. Positive cash flow means income exceeds expenses.
Spending on non-essential items and services -- things you want but do not need for basic survival, such as entertainment, dining out, and hobbies.
A liquid cash reserve of 3-6 months of essential expenses set aside for unexpected financial shocks like job loss, medical emergencies, or major repairs.
A recurring cost that remains the same amount each billing period, such as rent, mortgage payments, and insurance premiums.
A savings account that pays significantly more interest than a traditional savings account, often 10-20 times the national average, while still providing FDIC insurance and easy access.
A savings strategy where small amounts are set aside each month toward a specific planned future expense, such as annual car registration, holiday gifts, or a vacation.
A recurring cost whose amount changes each billing period based on usage or choices, such as groceries, electricity, and gasoline.
A budgeting method in which every dollar of income is assigned to a specific category (spending, saving, investing, or debt repayment) so that income minus all allocations equals zero.