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2- Guided Notes-Financial Planning

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Last updated 4 days ago
2 questions
By only focusing on the yellow highlighted areas, fill in the blanks with the correct words. Watch out for typos.
FINANCIAL STATEMENTS
33
Question 1
1.
BUDGETING
Required
31
Question 2
2.
Three main money management activities are
_______
_______
_______

Personal Financial Statements
Personal financial statements tell you _______
Two documents you create yourself are the _______ and the _______
Main purpose of personal financial statements are to:
1. _______
2. _______
3. _______
4. _______

Balance Sheet
A balance sheet (i.e., _______ or statement of financial position) is a financial statement that reports what an individual or family _______.

_______ minus _______ equals _______

In other words, computing net worth
_______ minus _______ equals _______

Individuals and families can increase their net worth by any one of the following:
  • _______
  • _______
  • _______
  • _______

Cash Flow Statement
  • Cash flow is the actual _______ and _______ of cash during a given time period
  • Cash flow statement (i.e., personal income and expenditure statement) summarizes cash _______ for a given period
A Plan for Effective Budgeting
  • A budget, or _______ , is necessary for successful financial planning
  • Budgeting will help you do the following:
  • _______
  • _______
  • _______
  • _______
  • _______
Budgeting is an _______ , and you will need to _______ your spending plan on a regular basis
What is a budget?
• A financial _______ for dividing up your income among saving and spending options.
- Helps you achieve _______ goals.
- Prevents financial _______.
- Types: _______, _______, yearly

How to start a budget?
First:
- Track all of your _______ for a month.
Keep a _______ or a _______ of every penny you spend for a month.
▪ Example: Bills, eating out, clothing etc.
- Calculate _______
▪ Find ways to decrease spending

What is income?
• Income: money that is _______ .
• Could be wages from _______ , public assistance, _______ , alimony or other sources.
Gross Income:
• Total income without _______ .
Net Income:
• Gross income-minus _______ , _______ , _______

Figuring Out Expenses
• Fixed Expenses
- The amounts that you have _______ to spend o It is easy to plan ahead because you know EXACTLY how much money is due o Examples of Fixed Expenses: _______, _______, Blank 20. .

• Variable/Flexible
- Amounts that you can _______ to spend or not to spend.
- You have to decide which of your options you _______ .
- Sometimes difficult to _______ .
- Examples of Variable/Flexible: _______ , _______ , _______ .

Developing Your Budget
• List all of your _______.
• List some of your _______.
• _______ your needs and wants to get your total expenses.
• Write down your _______ income.
• _______ expenses from your income.
• Any money you have left will and should be your _______.