1. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved.

2. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Money Management Strategy What money management techniques can you employ to achieve your future financial goals?

3. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Organizing and maintaining a personal financial plan are essential to budgeting for future financial goals. Chapter 12 Money Management Strategy

4. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. money management safe-deposit box personal financial statement net worth assets wealth liquid assets real estate market value liabilities insolvency cash flow income take-home pay discretionary income surplus deficit budget budget variance Chapter 12 Money Management Strategy

5. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Money Management Strategy

6. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Section 1Organizing Financial Records Discuss the relationship between opportunity costs and money management. Explain the benefits of keeping financial records and documents. Describe a system to maintain personal financial documents. Chapter 12 Money Management Strategy

7. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Organization of Financial Documents Section 1Organizing Financial Records Chapter 12 Money Management Strategy Financial Documents Pay Stubs Automobile Titles Bank Statements Birth Certificates Broker Reports Marriage License Credit Card Statements Tax Forms

8. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Organization of Financial Documents Section 1Organizing Financial Records Chapter 12 Money Management Strategy What can an organized system do for you? Determine your current financial status. Pay your bills on time. Complete required tax reports. Plan for the future. Make sound financial decisions related to investments.

9. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. How are the roles of maintaining financial records and managing opportunity costs in a sound financial plan similar and different? Managing opportunity costs and maintaining financial records are both critical to a sound financial plan. Making sound financial decisions to get the most out of your money is an important step. In order to make and track these decisions you need to maintain financial records to keep track of your money and determine your financial position. Section 1Organizing Financial Records Chapter 12 Money Management Strategy

10. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Describe a personal balance sheet and cash flow statement. Develop a personal balance sheet and cash flow statement. Section 2Personal Financial Statements Chapter 12 Money Management Strategy

11. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Personal Balance Sheet Section 2Personal Financial Statements Chapter 12 Money Management Strategy How to Increase Your Net Worth Reduce Expenses Reduce Spending and Debts Increase Your Savings Increase Your Investments

12. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. How are a personal balance sheet and cash flow statement similar? How are they different? What role does each play in the development of a personal financial plan? Section 2Personal Financial Statements Chapter 12 Money Management Strategy A cash flow statement and a personal balance sheet both list expenses/liabilities and provide a snapshot of your financial situation. However, a cash flow statement does not break down all of your liabilities. It focuses on your monthly payments. A personal balance sheet does not show your income only the balance in your accounts.

13. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Identify the steps to create a personal budget. Discuss the advantages of increasing your savings. Section 3Budgeting for Financial Goals Chapter 12 Money Management Strategy

14. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Preparing a Budget Section 3Budgeting for Financial Goals Chapter 12 Money Management Strategy Steps to Developing a Budget 1. Set Your Financial Goals 2. Estimate Your Income 3. Budget for Unexpected Expenses 4. Budget for Fixed Expenses 5. Budget for Variable Expenses 6. Record What You Spend 7. Review Spending and Saving Patterns

15. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. A Successful Budget Section 3Budgeting for Financial Goals Chapter 12 Money Management Strategy Characteristics of an Effective Budget Carefully Planned PracticalFlexible Easily Accessible

16. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Increasing Your Savings Section 3Budgeting for Financial Goals Chapter 12 Money Management Strategy Savings Strategies Pay Yourself First Use Payroll Savings Spend Less

17. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Explain why it is sometimes difficult for people to increase their savings. How will increasing the amount you put in savings affect your budget? It is difficult to resist the temptation to spend any extra money each month. If you increase your savings you may need to adjust spending in another area such as your variable expenses. Chapter 12 Money Management Strategy Section 3Budgeting for Financial Goals

18. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Balance of Trade Chapter 12 Money Management Strategy Balance of trade is determined by subtracting total imports from total exports over a period of time. What could a surplus in the balance of trade mean? Strong Manufacturing Base High Tariffs Overseas Demand for U.S. Products Less Disposable Income for Consumers

19. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Money Management Strategy

20. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Money Management Strategy

21. Glencoe Business and Personal FinanceCopyright © by The McGraw-Hill Companies, Inc. All rights reserved. End of