2. Fixed Expenses: Bills paid every month that remain constant.
Example: Mortgage, rent, car payment, school loan. These expenses
are essential and unlikely to fluctuate.
Variable Expenses: Bills that you may or may not have
every month and their value fluctuates, such as
clothing, entertainment, gifts, eating out. You can control
these expenses.
Fixed Variable Expenses: Bills you will have every month, though
the cost may fluctuate slightly from month to month such as
electricity and gas. You can effect
these expenses slightly.
3. ASSETS
Things you own that have
value .
LIABILITIES
Things that cost you money
or that you owe money on.
4. SOLVENT
You have more assets than debt.
After all the debts have been paid
there is still something of value
left.
INSOLVENT
You have more debt than assets.
After all the assets are gone and
you are still OWE money.
5. FAVORABLE CREDIT
SITUATION
Solvent: Assets are greater
than liabilities.
(Strive for this.)
UNFAVORABLE CREDIT
SITUATION
Insolvent: Liabilities are
greater than assets.
(Don’t let this happen.)
6. Disposable Income: Net income (the money left
after all deductions have been taken.)
Discretionary Income: Money left over after all
bills have been paid.
Cash Management: How you handle money
coming and money going out.
7. PYF- Pay yourself first. Be a disciplined
saver. Savings should be a part of the budget.
▪ Cost/Benefit Analysis: Weigh the cost of the
product vs. the benefit it will provide.
8. Review the terms from this PowerPoint.
Fixed Expenses
Variable Expenses
Fixed Variable Expenses
Assets
Liabilities
Solvent
Insolvent
PYF
