SS8E3 Personal Money Management

• Income: money received for labor or services (work), the sale of property or goods, financial investments

  • Knowing monthly income allows a person to know how much money they have for expenditures

• Expenditures: Money spent on things

  Knowing these things can allow a person to set long-term and short-term financial goals!

• Creating a budget allows a person to keep track of their spending and make long-term and short-term savings goals

  • Budget: A plan for spending & saving money

• To create a budget:

  • Start with income (how much money will be available)

  • Look at bills (expenditures)

  • Add in money needed for food, transportation, entertainment

  • Savings/investments

• An individual gains increased financial freedom when in control of personal finances.

• A budget encourages an individual to save so that long-term financial goals can be achieved.

• Budgets help adapt to changes in financial circumstances, whether it be an emergency, loss of a job, or extended sickness.

• Budget analysis allows an individual to understand where money is spent and to identify unnecessary expenditures.

• Savings: Money set aside for future purchases or emergencies

There are many reasons for saving money including:
- Providing a cushion in case of loss of job or emergencies
- Planning for retirement
- Education costs
- Making large, expensive purchases like homes, vehicles, appliances, vacations

Without savings, unexpected events can result in large financial burdens

There are many benefits to saving money:
- Money for investments
- Lowers stress level
- Allows for wealth building
- Allows one to persue opportunities: personal dreams, travel, overseas jobs

• Debt: An amount of money owed to another

• Debit: Using a card to spend cash from your bank account

• Credit: Making a purchase now and paying later with interest added

• Interest: An additional amount of money you are charged for a debt

• Bankruptcy: A legal proceeding involving a person or business that cannot repay their debts