Key Terms
Income
The amount of money entering a household, regardless of source.
Fixed income
A set, consistent amount of income; the person must plan expenses to fit within that fixed amount. They cannot spend mor
Biweekly
Twice per month or every other week.
Sources of income include
Employment wages, pension/retirement plans, Social Security, unemployment, child support/alimony, financial aid/scholars
Debt
Money a person owes after borrowing.
Interest
The additional money charged on top of what was borrowed; the cost of borrowing money from lending agencies or credit ca
Debt-to-income ratio
A comparison of how much someone owes versus how much they earn. A calculator worksheet is available from American Consu
Purpose
Tracks every expense over a period of time to show where money is going and where cuts can be made.
Rule
Track EVERY item purchased, even small or seemingly insignificant ones. Small unnecessary purchases add up and are often
Allocated
Distributed or assigned to a particular category. The tracker shows where money needs to be allocated and where it can b
Budget
A plan for expenses within the limits of available income.
Three-step process
1. Determine all household expenses 2.
Expenditures
Expenses. Categories include rent/mortgage, car payment, car insurance, health/dental insurance, homeowner's/renter's in
Monthly Income Worksheet categories
Salary/wages (self), salary/wages (spouse or partner), Social Security, unemployment, child support/alimony, financial a
If result is POSITIVE
Income exceeds expenses; family has money remaining; can go to savings, retirement, college fund, or emergency fund.