© South-Western Educational Publishing Chapter 8 Budgets and Financial Records  Budgeting and Record Keeping  Legal Documents and Filing Systems

GOALS © South-Western Educational Publishing Lesson 8.1 Budgeting and Record Keeping  Describe and prepare personal budgets.  Explain the purpose of record keeping.  Prepare a personal net worth statement and a personal property inventory.

© South-Western Educational Publishing Importance of Financial Planning  Why should you prepare a budget?  To achieve financial success, you must plan and work for it  Disposable income- (see notes)  Financial plan- (see notes)  Budget- (see notes)

© South-Western Educational Publishing Preparing a Budget  Estimate your income.  Decide how much to save.  Estimate your expenses.  Balance your budget.

© South-Western Educational Publishing Income Work $320 Allowance20 Lunch money40 Total income$380 Total expenses$260 Simple Budget Expenses Lunches $ 80 Supplies20 Snacks40 Entertainment120 Savings To credit union$120 Total expenses plus savings$380

© South-Western Educational Publishing What if my budget doesn’t work?  Delay buying items you don’t need  Save a little less each month  Find a way to bring in more money

© South-Western Educational Publishing Monthly Budget  Fixed expenses- (see notes)  Variable expenses- (see notes)  If you need to reduce your budget, should reduce fixed or variable expenses?  Variable because you can change them without making a major revision to your life

© South-Western Educational Publishing Personal Records  Records of income and expenses  Net worth statement  Personal property inventory  Why do you need this?  Tax records

© South-Western Educational Publishing Net Worth Statement Assets –Liabilities Net worth

© South-Western Educational Publishing Personal Property Inventory YearPurchaseApproximate ItemPurchasedPrice Current Value

GOALS © South-Western Educational Publishing Lesson 8.2 Legal Documents and Filing Systems  Discuss the elements of legal contracts and your responsibilities regarding contracts.  Describe negotiable instruments and warranties.  Discuss ways to set up a filing system for personal records.

© South-Western Educational Publishing Types of Contracts  Express contracts  Oral  Written  Implied contracts  Expected

© South-Western Educational Publishing What contracts must be in writing?  For the sale of real property  Contracts that cannot be fully performed in less than 1 year  Contracts involving $ and more  Agreements to pay the debts of others

© South-Western Educational Publishing Elements of an Enforceable Contract  Agreement- valid offer is made and accepted  Consideration- anything of value exchanged  Contractual capacity- legally competent  Legality- contract must be legal

© South-Western Educational Publishing 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.

© South-Western Educational Publishing 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

© South-Western Educational Publishing Warranties  A statement about a products quality or performance  Warranty of merchantability  Warranties do not protect against normal wear and tear

© South-Western Educational Publishing Filing Systems for Personal Records  Paper filing system  Electronic record keeping  Spreadsheet  Database

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