Vocabulary

Adjusted Budget: This version of your budget reflects the changes you've made, whether in income or spending behavior, since your initial budget was created.

Deductible: A clause in an insurance policy that exempts the insurer from paying an initial specified amount in the event that the insured individual sustains a loss. If you have a $500 deductible on your car insurance policy, you would pay the first $500 of any accident repair for which you filed a claim.

Discretionary income: earnings that are available for use as needed or desired.

Fixed Expense: An expenditure of money that does not change; a cost over which the consumer has little or no control. Fixed expenses usually include rent or mortgage payments (though there are options to reduce these, as well), tuition payments, union dues, etc.

Income: The amount of money or its equivalent received during a period of time in exchange for labor or services, from the sale of goods or property, or as profit from financial investments. Alternative forms of income could be from disability payments, child support, and alimony, basically any money received on a regular basis.

Initial Budget: A listing of your current income and expenditures. An initial budget simply represents your actual income and spending habits. It does not reflect the measures you are going to take to adjust these.

Net Income: The amount of money left from your paycheck after taxes and other obligations have been deducted.

Periodic Expense: Any obligation that is due on a less-than-monthly basis during the year. For example, in some areas of the country, property taxes may only be due on two dates, May 1 and November 1. By budgeting accordingly, you can make sure that you could handle the significantly larger payouts during those months.

Variable Expense: An expense that can be changed, in this case by the budgeting measures taken by the consumer. Common variable expenses include groceries, utilities, and all discretionary expenditures.