Objective [1]
Recognize relationships among financial documents and
money management activities.
Successful money management requires effective coordination
of personal financial records, personal financial statements, and
budgeting activities.Objective [2]
Create a system for maintaining personal financial records.
An organized system of financial records and documents is the
foundation of effective money management. This system should
provide ease of access as well as security for financial documents
that may be impossible to replace.Objective [3]
Develop a personal balance sheet and cash flow statement.
A personal balance sheet, also known as a net worth statement,
is prepared by listing all items of value (assets) and all amounts
owed to others (liabilities). The difference between your total
assets and your total liabilities is your net worth. A cash flow
statement, also called a personal income and expenditure statement,
is a summary of cash receipts and payments for a given
period, such as a month or a year. This report provides data on
your income and spending patterns.Objective [4]
Create and implement a budget.
The budgeting process involves four phases: (1) assessing your
current personal and financial situation, (2) planning your financial
direction by setting financial goals and creating budget
allowances, (3) implementing your budget, and (4) evaluating
your budgeting program.Objective [5]
Calculate savings needed for achieving financial goals.
Future value and present value calculations may be used to compute
the increased value of savings for achieving financial goals.
