Front
Discretionary Spending
Back
Non-essential 'want' purchases
Reduce these first when trying to increase your monthly savings rate.
Public Deck
Personal Finance Basics - 40 Essential Concepts
Build financial literacy with 40 flashcards covering budgeting, investing, credit, taxes, and retirement planning.
AnyFlashcards40 cards
Preview
Front
Scenario: You earn $4,000/mo net. Using the 50/30/20 rule, how much goes to 'Needs'?
Back
$2,000
Allocate 50% of your net income to essentials like housing, utilities, and groceries.
Front
Zero-Based Budgeting
Back
Income minus expenses equals zero
Assign every dollar a specific job so no money is left unaccounted for.
Front
Fixed Expenses
Back
Costs that remain constant each month
Examples include rent, mortgage, or car insurance premiums.
Front
Variable Expenses
Back
Costs that change from month to month
Track items like groceries, gas, and entertainment to find potential savings.
Front
Emergency Fund
Back
3-6 months of living expenses
Keep this in a liquid account to cover unexpected costs like medical bills.
Front
Gross vs. Net Income
Back
Total pay vs. 'Take-home' pay
Always budget based on Net Income (after taxes and deductions).
Front
Sinking Funds
Back
Saving small amounts for a specific future expense
Set aside $50/month for a holiday fund to avoid debt in December.
Front
Compound Interest
Back
Interest earned on both principal and accumulated interest
Start early to let time maximize your exponential growth.
Front
Diversification
Back
Spreading investments across various assets
Reduces risk by ensuring one poor-performing stock doesn't ruin your portfolio.
+ 30 more cards
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