A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Zero-Based BudgetingA budgeting method where you assign every dollar of income a job until nothing is left unassigned, so income minus all allocations equals zero.
- Pay Yourself FirstThe habit of setting aside money for savings or investing as soon as you get paid, before spending on anything else.
- Needs vs. WantsThe distinction between spending you truly must cover to live, like housing and food, versus spending you choose for enjoyment or convenience.
- Discretionary SpendingMoney spent on nonessential things you want but could go without, like dining out, hobbies, or entertainment.
- Fixed ExpensesCosts that stay roughly the same amount each month, like rent, insurance premiums, or a loan payment, making them easy to plan around.
- Cash FlowThe movement of money into and out of your accounts over time, showing whether more comes in than goes out.
More in Budgeting & Cash Flow
Plain-English education — not personalized legal, tax, or investment advice.