1. Chapter 8 Budgets and Financial Records
MYPF Chapter 08
11-Sept-2001
Chapter 8 Budgets and Financial Records
8.1: Budgeting and Record Keeping
8.2: Legal Documents and Filing Systems
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2. Lesson 8.1 Budgeting and Record Keeping
Lesson Goals:
Describe the budgeting process and prepare personal budgets.
Explain the purpose of record keeping and be able to prepare a personal net worth statement and a personal property inventory.
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3. Importance of Financial Planning
Disposable income
The money you have left to spend or save after taxes have been paid.
Financial plan
An orderly program for spending, saving, and investing the money you earn.
Steps in Financial Planning:
1. Determine and evaluate money related options
2. Make sure you use your limited funds for the things you want most
3. Prevent careless and wasteful spending
4. organize your financial resources
5. Avoid money worries by planning your saving, spending and borrowing to stay within your financial means.
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4. Preparing a Budget
Budget: a spending and savings plan based on your expected income and expenses.
Steps in Budgeting:
Estimate income
Decide how much to save
Estimate expenses
Balance your budget – You can’t spend or save money you don’t have.
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5. Simple Budget Income Work $320 Allowance 20 Lunch money 40 Expenses
Lunches $ 80
Supplies 20
Snacks 40
Entertainment 120
Total income $380
Total expenses $280
Savings
To credit union $100
Total expenses plus savings $380
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6. Monthly Budget Fixed expenses
Costs you are obligated to pay at specific times, regardless of other events (rent, mortgage)
Variable expenses
Costs that vary in amount and type, depending on events and the choices you make.
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7. Personal Records Records of income and expenses Statement of net worth
Personal property inventory
Tax records
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8. Statement of Net Worth Assets – Liabilities Net worth
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9. Personal Property Inventory
Year Purchase Approximate
Item Purchased Price Current Value
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10. Lesson 8.2 Legal Documents and Filing Systems
Explain the elements of legal contracts and negotiable instruments and describe your rights and responsibilities.
Discuss ways to set up a filing system for personal records.
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11. Essential Elements of an Enforceable Contract
Agreement
Consideration
Contractual capacity
Legality
Genuine assent
Legal form
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12. Valid, Void, and Voidable Contracts
Valid contracts
Contain all essential elements of a contract
Void contracts
Missing one or more of the essential elements
Voidable contracts
Can legally be avoided by one party involved
Example: Minor
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13. Consumer Responsibilities in Agreements
Understand agreement.
Keep a copy of the agreement.
Be sure the agreement is dated correctly.
Be sure all blank spaces are filled in or marked out.
Be sure all terms agreed upon are written clearly.
Be sure all dates, amounts, and other numbers are correct and clearly written.
Be sure proper disclosure is made by the seller.
Be sure all cancellations and adjustments are made in accordance with the contract.
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14. Negotiable Instruments
Must be in writing and signed by the maker
Must contain an unconditional promise to pay a definite amount of money
Must be payable on demand or on a fixed or determinable future date
Must be payable to the order of a particular person or to the holder of the note
Must be delivered to the payee
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15. Warranties Limited warranty Example: specified time Service contract
Example: Car
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16. Filing Systems for Personal Records
Paper filing system
Electronic record keeping
Spreadsheet
Database
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17. Home Filing System Medical Warranties Insurance Utilities Household
Travel
Entertainment
Taxes
Automobile
Subscriptions
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