Business Essentials
Essay by Nicolas • June 29, 2011 • Study Guide • 599 Words (3 Pages) • 1,687 Views
Money Management Basics
* Refers to the day-to-day financial activities associated with using limited income to satisfy your unlimited wants and needs
* Involves getting the most for your money through careful planning, saving, and spending
* Involves making & using a plan for spending
Successful Money Managers
* Set goals
* Make wise decisions
* Buy wisely
* Live w/in their income
Personal balance sheet
* Assets- things people OWN
* Liabilities- things people OWE
* Net Worth- ASSETS- LIABILITIES= NET WORTH
Personal Cash Flow Statement
* Cash inflows
* Cash outflows
* Compare inflows & outflows
Budget activities
* Live w/in your income
* Achieve your financial goals
* Buy wisely
* Avoid credit problems
* Plan for financial emergencies
* Develop good money management skills
The Budget Process
* Set financial goals
* Plan budget categories
* Maintain financial records
* Evaluate your budget
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
Advantages of financial planning
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