Vocabulary: Mint Simulation

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The Vocabulary:

BUDGETING

50/30/20 Rule — Financial planning guideline that suggests spending no more than 50% of disposable income on needs, 30% on wants, and allocating 20% to saving or paying off debt

Budget — An organized plan for saving and spending based on your expected income and expenses

Categorize — Organizing spending by essential and non-essential, then by groups of similar purchases

Disposable income — The money you have to spend or save as you wish after taxes, social security, and other required and optional deductions have been withheld from your gross pay

Emergency fund — An amount of money set aside to cover bills in case of emergency

Expenses — The things people pay for with their money

Financial plan — A plan of action that allows a person to meet not only the immediate needs but also the long-term goals

Fixed expenses — Expenses that remain the same each month

Flexible expenses — Expenditures that change each month and can be reduced or eliminated if necessary

Liabilities — Money owed to individuals, businesses, or institutions

Needs — Items necessary to live, such as clothing, food and shelter

Pay Yourself First — The concept of putting aside a sum of money into savings each month before paying other bills

Recordkeeping — To write down information about a transaction or series of transactions

Saving — The process of setting aside money until a future date instead of spending it today, to provide funds for emergencies, short-term goals, and investments

Short-term goal — Something a person plans to achieve within a one-year time period

Spending — The act of paying money for something

Spending habits — The ways in which a person typically uses money

Variable expenses — Expenses that increase or decrease

Wants — Items that are desired, but that are not needed to live