1. Budgets and Financial Records
Chapter 8
Budgets and Financial Records

2. Financial Planning Disposable income – . Financial plan –
All $$ you receive is _____, ______, or __________.

3. Reasons for Financial Planning
Determine and evaluate options for using $
Make sure you use your limited funds for the things you most want.
Prevent careless and wasteful spending.
Organize your financial resources.
Avoid money worries.

4. Preparing a Budget Budget –
Money coming in (earnings plus borrowing) must equal money going out (spending plus savings).
A budget should ___________
Total income =

5. Steps to Prepare a Budget-

6. Typical Monthly Budget
Example budget on page 210
Estimate income including wages, interest, and investment earnings
Fixed expenses –
Ex:

7. Typical Monthly Budget
Variable expenses –
Ex:

8. Personal Records -

9. Record of Income and Expenses-

10. Statement of Net Worth Assets – Liabilities = Net Worth Assets –
If Assets > Liabilities =
If Assets < Liabilities =

11. Personal Property Inventory
List of all valuable items you own
Include purchase price, and approx. value
Ex: Clothing, furniture, appliances, electronics
Useful in the event of fire, theft, property damage.
Also can take pictures or video.

12. Tax Records
Keep all tax returns, W-2 forms, and other receipts used for tax purposes.
Keep returns for at least __________.
Could be used in the event of an ____ _______.
Can be audited up to 3 years after filing return.

13. Legal Documents and Filing Systems
Contract –
Ex: credit plans, mortgages, rental agreements.

14. Types of Agreements
Express Agreements –
Implied Agreements -

15. Required Elements of an Enforceable Contract-

16. Elements AGREEMENT Mutual Assent –
2 conditions – Valid offer (intention) and acceptance of exact offer
Counteroffer -

17. Elements cont. CONSIDERATION –
Object of value, money, a promise, a performed service.
Each party must receive something of value and/or give something up.

18. Elements cont. CONTRACTUAL CAPCITY Competent parties –
Cannot have a mental deficiency or illness
May not be a minor (limited contractual capacity)

19. Elements cont.
LEGALITY –
LEGAL FORM –

20. Elements continued
GENUINE ASSENT – cannot contain any of the following:
Fraud -
Mistake
Duress -
Undue Influence -

21. 4 Elements of Fraud 1) 2) 3) 4)

22. Classification of Contracts
Valid -
Void -
Voidable -

23. Consumer Responsibilities
Understand all clauses and terms
Keep a copy of agreement
Be sure agreement is dated correctly
Be sure all blank spaces are filled in
Be sure all terms are written clearly
Be sure all numbers are correct
Be sure proper disclosure is made by the seller
Be sure all adjustments are made in accordance with terms of the contract

24. Negotiable Instruments
Ex:
Cosigner -

25. Negotiable Instruments
Legally collectable if: 1) 2) 3) 4) 5)

26. Warranties Warranty – All products contain implied warranties–
Specific warranties often guarantee that a product will perform for a certain period of time.

27. Personal Record Keeping
Paper Filing System – filing cabinet w/ labeled folders
Electronic Record Keeping
Spreadsheet -
Ex:
Database -