planning how to get the most from your money
personal financial statement
a document that provides information about an individual's current financial position and presents a summary of income and spending
the difference between what you own and the debts that you owe
cash and item that can be quickly converted to cash
the price at which property would sell
a small, secure, storage compartment that you can rent in a bank
the debt you owe
the money left after paying for the essentials, such as food, clothing, shelter, transportation, and medication
extra money that can be spent or saved, depending on a person's financial goals and values
changes each month, such as utility bills (Heat, electricity, water/sewer, phone)
not enough money; liabilities are more than assets
Cash flow statement
gives you important feedback on your income and spending patterns
advantage of using a safe-deposit box
can protect documents from fire, can find important documents easily
disadvantages of using a safe-deposit box
can cost up to $100 a year to rent, not always available 24-7
3 examples of liquid assets
savings account, checking account, cash
3 examples of current liabilities
taxes, mortgage, credit card debt
3 examples of what you might buy with discretionary funds
videos, movies, extra clothes, alcohol, cigarettes
3 examples of variable expenses
electric bills, heat, water/sewer, phone
How can you make your net worth go up?
pay off previous debt, don't get new debts, don't carry a balance on your credit card
The steps in planning a budget:
set financial goals, estimate your income, budget for unexpected expenses, budget for fixed expenses, budget for variable expenses, record what you spend, review spending and saving patterns,
Characteristics of a good budget
flexibility, accessible, practical, planned carefully
Savings options that employers offer
putting paycheck deductions in employees' retirement funds
How can you determine if an investment will increase net worth or not?
Make sure assets increase instead of liabilities.
What savings plan do you have and why do you use it?
I have money automatically deposited into a savings avvount instead of leaving it in my checking account.