A budget is an estimate of what a person earns and spends within a specific time period (i.e., monthly, etc.). Budgets are useful tools for giving you a clearer picture of your finances and helping you identify any unnecessꦚary or excessive expenditures. A budget als🧔o makes it easier to determine the timeline for long-term saving goals by calculating how much surplus savings you would have after a certain amount of time.

Savings refers to an amount of money remaining from an individual or household’s disp꧙osable income after paying all of their expenses and obligations for a sp𝓀ecific time period (i.e., monthly, etc.). Savings includes both cash as well as cash equivalents, such as bank account holdings. Although savings can be put toward many different long-term life goals, it’s also crucial to have enough saved up for emergencies.

Financial health refers to the current state of a person’s monetary assets and liabilities. Although each person's financial circumstances are different, there are rough guidelines that can be used to measure anyone’s financial health. A financially healthy individual may have a steady flow of income, consistent expenses, and regularly increasing savings.

An inflexible expense is a recurring expense that typically cannot be altered or eliminated. Inflexible expenses are often set at a fixed amount and payment schedule, such as a monthly rent payme𒈔nt. In addition to current sources of income, lenders closely examine monthly expenses when considering applicants for personal loans, mortgages, or auto loans.

Quality of life refers to a non-financial measurement generally associated with job and life satisfaction. A person’s quality of life is highly subjective to their personal experience, though it is often tied to financial security (among other factors). The potential tradeoff between money and quality ♓of life is typically taken into account when considering things like a career💝 or a personal savings plan.

Showrooming is the act of visiting brick-and-mortar retailers in order to see products in person before buying them online for a cheaper price. This practice allows customers to try out an item before making a decision to buy it while also finding the best price, which also gi✤ves an edge to online retailers. Brick-and-mortar stores have used multiple different marketing tactics to combat showrooming.

The average propensity to consume (APC) is a measurement of how much of an individual’s income is spent rather than saved. The APC is calculatꦍed by dividing average household consumption (i.e., spending) by average household income (i.e., earnings). On a broader economic level, a high APC can be a sign of a healthy economy, since consum🐻er spending drives economic growth.