My Personal Budget Vocabulary

Income Money received, especially on a regular basis, for work or through investments. Easy Definition: Money that you have MADE.

Expenses Money spent over a given period time. Easy Definition: Money that is being SPENT.

Budget A tool that compares income and expenses over a set period of time.

Income < Expenses Deficit The amount by which, especially a sum of money is too small. Hint: You have a deficit when you are spending more money than you make. It simply means you don’t have enough of what you need so you have a deficit. Income < Expenses

Debt The state of owing money. Hint: You have spent more than you have made so you owe someone money. If you run a deficit month after month then you go into debt. Meaning you owe somebody money.

Income > Expenses Surplus An amount of something left over. Hint: You have made more money than you are spending so you have some left over. Income > Expenses

Balanced Budget Is a budget where Income = Expenses. Income = Expenses

What-if Analysis Is easy to do in Excel. Involves asking a simple question starting with ‘What if…’. Example… What if I made $100,000 this year, how would that impact my budget? OR What if I lose my job this year, how will that impact my budget?

What-if Analysis Is very powerful! Allows you to quickly test different scenarios and see INSTANT results. Allow you to make better decisions.