Chapter 8 Outline Erick Valenzuela

Budgeting
  • Disposable income is money you have left to spend
  • This includes a financial plan which consists of goals for spending and saving
  • A Budget is a plan that helps you with your spending and saving
Fixed expenses: costs that do not change from month to month Variable expenses: Costs that vary in amount and type depending on choices you make
Personal records
  • W-2 forms are part of your income and expenses records
  • Net worth statement shows a person's net worth based on his or her assets and liabilities
  • A personal property inventory is a list of the valuable items you own along with their prices
  • Tax records should always be kept along with car titles, insurances policies, and passports
Legally Binding Agreements
  • Contracts are used to legally enforce agreements between two or more people
  • An implied contract is sometimes created but not written due to the actions of someone

A contract is binding when it has 4 elements...

  • Agreement: occurs when a valid offer is made and accepted
  • Consideration: occurs when something of value is exchanged for something else of value
  • Contractual Capacity: occurs when the parties of the contract are legally able to get involved
  • Legality: occurs when the contract has a lawful purpose

Responsibilities:

  • You are responsible for holding your end of the contract
  • Responsible for reading all terms and conditions
  • Check if changes are made to the contract
  • Keep a copy of the agreement
Sometimes a negotiable instrument is used in contracts

Warranties

  • Also called a guarantee, is a statement assuring quality and performance of a product
  • All product contain implied guarantees
  • Warranties do not protect the product against normal wear and tear of the product

Personal record keeping

  • Paper filing system which includes folders and labels and a file
  • Makes papers easy to bring up when needed
  • Electronic record keeping is also a way of organizing your papers
  • Ease of updating info, record storage and retrieval and speed of making new computations and comparisons come with electronic record keeping
  • People sometimes use spreadsheets or databases to organize their information and records

Credits:

Created with images by joaogbjunior - "money salary coins" • stevepb - "credit squeeze taxation purse" • PublicDomainPictures - "achievement bar business" • image4you - "euro coins currency" • stux - "conditions period contractual terms and conditions" • TeroVesalainen - "handshake hand give" • edar - "business signature contract" • renaissancechambara - "100% happiness guaranteed" • lafa.pixellutions - "Wedding Contract" • Tomasz_Mikolajczyk - "files papers documents"

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