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FMLY 2400 - LECTURE- MONEY MANAGEMENT EXAM STUDY SET
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FMLY 2400 - LECTURE- MONEY MANAGEMENT EXAM STUDY SET ...
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FMLY 2400 - LECTURE- MONEYMANAGEMENT EXAM STUDY
SET
money management - Answer day to day financial activities to manage current personal
economic resource while working toward long term financial security
challenge with money management - Answer to coordninate these decisions with one's
needs, goals and personal situation
what's at the centre of financial planning - Answer daily spending and saving decisions
recall: opportunity costs and money management - Answer -spending money reduces
the amount that can be saved and invested
-saving and investing reduces the amount that can be spent now
-buying on credit ties up future income
-using savings for purchases results in lost interest earnings:savings cant be used for
other purposes
-comparison shopping can save money but uses up valuable time
major money management activities - Answer 1. storing and maintaining personal
financial records and documents
2. creating personal financial statements (balance sheets and cash flow statements of
income and outflows)
3. creating and implementing a plan for spending and saving (budgeting)
disposing of financial records - waste basket - Answer -receipts for small, non tax
deductible purchases
-expired warranties
disposing of financial records - shredder - Answer -quarterly investment account
statements
-documents you no longer need with personal information
disposing of financial records - computer recycle bin - Answer -empty recycle bin on
regular basis
-make sure personal data files are completely erased
, create personal financial statements to - Answer -summarize the values of the items
owned and the amounts that are owed
-track cash inflows by source and outflows by type
-identify strength and weaknesses in current financial situation
-measure progress towards financial goals
-provide data for use in filing income tax returns or applying for credit
personal balance sheet - Answer -a financial statement that reports what an individual
or family owns and owes, also called a net worth statement
-items of value (what is owned) - amounts owed (what is owed) = net worth (wealth)
components/steps of a balance sheet (net worth statement) - Answer 1. listing items of
value
2. determining amounts owed
3. computing net worth
listing items of value - Answer assets:
-liquid assets
-real estate
-personal possessions
-investment assets
assets - Answer -cash and other property with a monetary value
-liquid assets
-real estate
-personal possessions
-investment assets
liquid assets - Answer cash and items of value easily converted to cash
real estate - Answer home, condo, vacation property or other land owned
personal possessions - Answer automobiles and other personal possessions
investment assets - Answer funds set aside for long term financial needs
determining amount owed - Answer liabilities:
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