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A Spending Plan consists of a spread sheet 

that allows you to better see and understand 

what you have and are going to spend money 

on. I've learn that through this method it is 

much easier to keep track of your own life 

financially. It enables you to make your financial 

future better by laying out exactly what you 

plan to spend money on and gives you the 

ability to limit yourself on how much you can 

spend in each category of expenses.

Net Gain- is something you aim for when 

doing your financial plan. It means that you are 

worth more money now even with the 

expenses you had to pay that month. Whatever 

money you have left over is known as a net 

gain. If your ending number is negative then it 

is known as a net loss. This number is the 

determining factor of how much you "are 

worth" in the financial world. 

Income and Expense Statement- Is a 

statement that shows your income and expense 

transactions over a certain period of time 

generally a month. It explains what happens to 

your money from the time your receive it to the 

time you spend it. From this you are able to 

plan your finances to ensure financial security. 

Also it acts as a base that can help you 

establish financial goals, and increase your net 

worth. 

Gross Income vs Net Income- The difference 

between these two incomes begins with gross 

income; which is your salary you earn before 

tax deductions. Net Income is the the end 

result; the money you are left with after taxes 

which is the money you have left to live off of 

until you receive your next paycheck. 

Unearned Income- Is the money that comes 

from sources other than employment; for 

example investments, savings, or the sale of 

personal assets. 

A Statement of Financial Position - Is very 

similar to a balance sheet but is for individuals, 

families, or businesses and basically describes 

their current financial condition including 

assets, liabilities and net worth. 

Tangible Assets- are assets that are used to 

create a lifestyle or make it better such as car, 

furniture, or electronics. 

The Market Value of an assets is the price 

that you could realistically resell that item for. 

Mostly all assets lose value as soon as they are 

purchase from the original distributor. 

An Investment Asset is something that you 

purchase in hope that it will generate income 

and appreciate the value to in turn make you 

more money in the future when you decide to 

sell it. Examples consist of : retirement 

accounts, stocks, bonds, mutual funds, and 

other forms of investing. 

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