Chapter 8: Big Ideas By: Amanda Van Den Berg

Financial Planning
  • Two important elements in financial planning are your income and your expenses
  • A good way to manage these are by making a Financial Plan
  • This is a way to set goals for spending, saving, and investing your money
  • Preparing a budget for yourself starts with knowing your resources as well as being able to visualize your future
Expenses
  • There are two types of expenses: Fixed Expenses and Variable Expenses
  • Fixed expenses are costs that do not change from month to month
  • Variable expenses are costs that vary in amount and type
  • Since variable expenses you can control a little bit, it is wise to be smart about any actions that could cause that expense to increase
Personal Records
  • Personal records prepare you for financial forms and long-term planning
  • Keeping your tax records and your W-2 forms are important when doing taxes
  • Your Net Worth is calculated by your Assets and Liabilities (Items you own and items you owe)
  • Personal Property Inventory: list of valuable items you own
Legally Binding Agreements
  • A contract is a legally enforceable agreement between two or more people
  • An implied contract is not written but is created by the actions or conduct of someone
  • Binding in a contract means all who enter into the contract are legally bound to abide by its terms, and must contain an agreement, consideration, contractual capacity, and legality
  • A counteroffer is a new offer because it changes the original offer
  • Consideration is something of value exchanged for something else of value
  • A negotiable instrument is a written promise to pay a sum of money upon demand of the holder
  • A co-signer is someone who promises to pay the debt of another person
Personal Record Keeping
  • A home filing system is a place where you keep important files and are often held in a file cabinet
  • Using labels and tabs will help to organize your files
  • Electronic record keeping can speed up updating your information and expand your storage space for more files
  • A spreadsheet organizes data into columns and rows and can perform calculations
  • A database is a computer program that organizes data for easy search and retrieval

Credits:

Created with images by FirmBee - "office tax business" • fancycrave1 - "calculator business office" • jarmoluk - "money card business" • FirmBee - "iphone visa business" • stevepb - "binding contract contract secure" • Peat Bakke - "Records"

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