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Budgeting & Personal Finance Terms

Financial terms related to budgeting, cash flow, and personal financial planning.

Budget

A financial plan that estimates income and expenses over a period of time.

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Cash Flow

The net amount of cash moving in and out of a household or business over a period.

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Emergency Fund

Savings set aside for unexpected expenses; typically 3–6 months of living costs.

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Net Worth

Total assets minus total liabilities; the clearest snapshot of financial health.

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Opportunity Cost

The value of the next best alternative foregone when making a financial decision.

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Zero-Based Budgeting

A budgeting method where every dollar of income is assigned a purpose.

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