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Itb Chap 16
 

Itb Chap 16

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Itb Chap 16 Itb Chap 16 Presentation Transcript

  • Money Management and Financial Planning 16-1 Personal Financial Statements 16-2 Budgeting Techniques 16-3 Your Financial Future 16
  • LESSON 16-1 Personal Financial Statements
    • Goals
    • Explain the basics of money management.
    • Create a personal balance sheet.
    • Develop a personal cash flow statement.
    Chapter 16 Slide
  • Key Terms
    • money management
    • personal assets
    • net worth
    • cash flow statement
    Chapter 16 Slide
  • MONEY MANAGEMENT BASICS
    • Refers to the day-to-day financial activities associated with using limited income to satisfy your unlimited needs and wants
    • Involves getting the most for your money through careful planning, saving, and spending
    • Involves making and using a plan for spending
    Chapter 16 Slide
  • SUCCESSFUL MONEY MANAGERS
    • Set goals
    • Make wise decisions
    • Buy wisely
    • Live within their income
    Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are some characteristics of a wise money manager?
    Chapter 16 Slide
  • PERSONAL BALANCE SHEET
    • Assets
    • Liabilities
    • Net Worth
    Chapter 16 Slide
  • SAMPLE PERSONAL BALANCE SHEET Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are three main categories of a personal balance sheet?
    Chapter 16 Slide
  • PERSONAL CASH FLOW STATEMENT
    • Cash inflows
    • Cash outflows
    • Compare inflows and outflows
    Chapter 16 Slide
  • SAMPLE PERSONAL CASH FLOW STATEMENT Chapter 16 Slide
  • >> C H E C K P O I N T
    • What do cash outflows represent?
    Chapter 16 Slide
  • LESSON 16-2 Budgeting Techniques
    • Goals
    • Identify purposes of a budget.
    • Describe steps for preparing a budget.
    • Describe characteristics of successful budgeting.
    Chapter 16 Slide
  • Key Terms
    • fixed expenses
    • variable expenses
    • allowance
    • budget variance
    Chapter 16 Slide
  • BUDGET ACTIVITIES
    • Live within your income
    • Achieve your financial goals
    • Buy wisely
    • Avoid credit problems
    • Plan for financial emergencies
    • Develop good money management skills
    Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are the main purposes of a budget?
    Chapter 16 Slide
  • THE BUDGET PROCESS
    • Set financial goals
    • Plan budget categories
    Chapter 16 Slide
    • BUDGET CATEGORIES
    • Savings
    • Food
    • Clothing
    • Household
    • Transportation
    • Health and personal care
    • Recreation and education
    • Gifts and contributions
    • Maintain financial records
    • Evaluate your budget
  • SAMPLE FAMILY BUDGET Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are eight commonly used budget categories?
    Chapter 16 Slide
  • CHARACTERISTICS OF AN EFFECTIVE BUDGET
    • Must be realistic
    • Should be flexible
    • Should be evaluated regularly
    • Must be well planned and clearly communicated
    • Should have a simple format
    Chapter 16 Slide
  • BUDGETING FORMATS
    • Software program
    • Handwritten
    • Checkbook
    • Unwritten
    Chapter 16 Slide
  • SAMPLE INCOME AND EXPENSE RECORD Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are five characteristics of an effective budget?
    Chapter 16 Slide
  • LESSON 16-3 Your Financial Future
    • Goals
    • Describe the financial planning process.
    • Explain actions for implementing a financial plan.
    • Identify actions for reviewing a financial plan.
    Chapter 16 Slide
  • Key Terms
    • financial plan
    • individual retirement account (IRA)
    • estate planning
    Chapter 16 Slide
  • ADVANTAGES OF FINANCIAL PLANNING
    • Your financial uncertainties will be reduced.
    • You will gain more control of your financial activities.
    • Your family and household members will know more in case they need to assume control of your finances.
    • Earning, spending, protecting, and saving your resources will be more systematic.
    Chapter 16 Slide
  • FINANCIAL PLANNING PROCESS
    • 1. Analyze your current financial condition
    • 2. Develop financial goals that are responsive to your vision
    • 3. Create your financial plan
    • 4. Implement the plan
    • 5. Revise your financial plan
    Chapter 16 Slide
  • FINANCIAL INVENTORY
    • Careful review of your finances
    • Personal balance sheet
    • Personal cash flow statement
    • Information about current financial position
    Chapter 16 Slide
    • Income
    • Savings
    • Investments
    • Property
    • Living expenses
    • Insurance
    • Money owed
  • PERSONAL FINANCIAL FILING SYSTEM
    • Personal records
    • Housing records
    • Consumer purchase records
    • Insurance records
    • Money management records
    • Tax records
    • Financial services and credit records
    • Investment, retirement, and estate records
    Chapter 16 Slide
  • FINANCIAL LIFE CYCLE
    • Teen years
    • Twenties
    • Later
    • Retirement
    Chapter 16 Slide
  • USING A FINANCIAL PLANNER
    • Questions you might ask when choosing a financial planner
      • What experience and training do you have?
      • Are you willing to supply references from past clients?
      • How are your fees determined?
    Chapter 16 Slide
  • >> C H E C K P O I N T
    • List five recommended steps for financial planning.
    Chapter 16 Slide
  • IMPLEMENT A FINANCIAL PLAN
    • Insure current income
      • Disability income insurance
      • Unemployment insurance
    • Plan for future income
      • Social Security
      • Pensions
      • Retirement accounts
      • Annuities
    Chapter 16 Slide
  • >> C H E C K P O I N T
    • What are common sources of income during retirement?
    Chapter 16 Slide
  • REVIEW YOUR FINANCIAL PLAN
    • Revise financial goals
    • Review financial activities
    • Remember to save
    Chapter 16 Slide
  • >> C H E C K P O I N T
    • What common activities are needed when reviewing a financial plan?
    Chapter 16 Slide