Practical PC, 7 th Edition Chapter 5: Organizing Files and Folders.
Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.
-
Upload
catherine-greene -
Category
Documents
-
view
213 -
download
0
Transcript of Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.
![Page 1: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/1.jpg)
Money Management
StrategiesCHAPTER 5
![Page 2: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/2.jpg)
Organizing Financial Records
CHAPTER 5 SECTION 1
![Page 3: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/3.jpg)
What financial documents should you keep and organize?
![Page 4: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/4.jpg)
What are some ways to organize these
documents?
![Page 5: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/5.jpg)
Money Management
• Day-to-day financial activities necessary to get the most from your money.
• Money trade-offs
![Page 6: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/6.jpg)
Financial Documents• First step in effective money
management is to organize your financial documents.
• Benefits:o Financial statuso Pay your bills on timeo Tax reportso Future planningo Investing decisions
![Page 7: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/7.jpg)
Storing Financial Documents
1. Locate your documents and sort them into categories such as payroll stubs, savings account, checking account, bills, etc.
2. Label and file each document
3. Maintain filing discipline
![Page 8: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/8.jpg)
Safe-Deposit Box
• A small, secure storage compartment that you can rent at a bank.
![Page 9: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/9.jpg)
#1 Personal Financial Statements
CHAPTER 5 SECTION 2
![Page 10: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/10.jpg)
Personal Balance Sheet
• Allows you to have a complete look at your financial situation.
• Step 1: Determine Assets
• Step 2: Determine Liabilities
• Step 3: Calculate Net Worth
• Step 4: Evaluate Financial Situation
Pg. 127 in text
![Page 11: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/11.jpg)
Determine Assets• Liquid Assets• Real Estate Assets• Personal Possessions• Investment Assets
![Page 12: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/12.jpg)
Liquid Assets• Cash and items that can quickly
be converted to cash.
• $800 in a savings account and $72 in cashoYour liquid assets are worth $872
![Page 13: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/13.jpg)
Determine Liabilities• Current (short term debt) - paid
within one year
• Long-term – Debts that require a longer term of repayment
• Insolvency – the inability to pay debt when it’s due
![Page 14: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/14.jpg)
#2 Cash FlowCHAPTER 5 SECTION 2
![Page 15: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/15.jpg)
Cash Flow Statement• Movement of cash in and out of your
wallet and/or bank account.
• Step 1: Record your income
• Step 2: Record your expenses
• Step 3: Calculate your net cash flow
• Pg. 131 - chart
![Page 16: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/16.jpg)
The next slide lists several types of
accounts. Categorize each account as belonging to the
personal balance sheet or cash flow statement.
![Page 17: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/17.jpg)
1. Take-home pay
2. Transportation
3. Checking Account Balance
4. Groceries
5. Credit Card Balance
6. Investment income
7. Student Loan Payment
8. Mortgage
![Page 18: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/18.jpg)
#3 Your Financial Position
CHAPTER 5 SECTION 2
![Page 19: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/19.jpg)
What is your net worth?
• Deficit – spend more than you earn• Loans make up for deficit – increases
liabilities
• Surplus – spend less than you earn• Increases net worth• Invest – pay off debts – etc.
![Page 20: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/20.jpg)
#4 Preparing a BudgetCHAPTER 5 SECTION 3
![Page 21: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/21.jpg)
Budget• A plan for spending and investing your
money to meet your wants and needs.
• Step 1: Set your financial goals• Step 2: Estimate your income• Step 3: Budget for unexpected expenses• Step 4: Budget for fixed expenses• Step 5: Budget for variable expenses• Step 6: Record spending
![Page 22: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/22.jpg)
Budget Variance
• The difference between the budget and the actual amount spent.
![Page 23: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/23.jpg)
Increasing Your SavingsCHAPTER 5 SECTION 3
![Page 24: Money Management Strategies CHAPTER 5. Organizing Financial Records CHAPTER 5 SECTION 1.](https://reader030.fdocuments.us/reader030/viewer/2022032704/56649d6e5503460f94a4fbac/html5/thumbnails/24.jpg)
Increasing Your Savings
• Essential component – open a savings account
• PAY YOURSELF FIRST!
• PAYROLL SAVINGS DEDUCTION
• SPENDING LESS TO SAVE