ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Start with a financial self-assessment. Once you know where you stand and what you hope to accomplish, pick a budgeting system that works for you. We recommend the 50/30/20 system, which splits your income across three major categories: 50% goes to necessities, 30% to wants and 20% to savings and debt repayment.

Detailed explanation-2: -The largest expense for most Americans is housing. At $1, 050 per month, the cost of having a roof over our heads accounts for 21% of a household’s monthly budget. Percentage of income is based on after-tax income.

Detailed explanation-3: -Pay yourself first (PYF) means automatically setting aside money from each paycheck, as soon as you receive it, rather than waiting to see what, if anything, is left over to save at the end of the month.

Detailed explanation-4: -An income statement is a financial statement that shows you the company’s income and expenditures. It also shows whether a company is making profit or loss for a given period.

Detailed explanation-5: -Gross pay is what employees earn before taxes, benefits and other payroll deductions are withheld from their wages. The amount remaining after all withholdings are accounted for is net pay or take-home pay.