My Money Management Guide

Personal Finance

S.M.A.R.T Goal

Specific: clearly defined end result

Measurable: determine exactly when you will know that the goal has been met

Attainable: create a step-by-step plan outlining exactly how the goal can be reached

Realistic: Consider trade offs and opportunity costs

Time bound: State when exactly you want the goal to be reached by. A shot term goal (less than one year) or a Long term goal (more than one year).

Debt Cards

A plastic card that is electronically connected to the cardholder's depository institution account

Types of accounts at depository institutions

(Depository Institution Businesses that provide financial services)

  • Savings accounts:Savings Account An account at a depository institution that is designed to hold money not spent on current consumption
  • Checking accounts:An account that allows quick access to funds for transactions
  • Credit Union:Depository institutions that offer many banking services and are owned by their customers

Setting A Budget

Spending Plan

A document used to determine the cash flow of an individual or family. A personal spending plan, similar to a budget, helps outline where income is earned and expenses are incurred.

Statement of financial position

A financial statement that describes an individual or family's financial condition on a specified date by showing assets, liabilities, and net worth

Income and expense statement

Lists and summarizes income and expense transactions that have taken place over a specific period of time, usually a month or year

The Basics of Taxes

Taxes –

A sum of money demanded by a government to support the government itself as well as specific facilities or services

Income Taxes

  • Income tax - tax on earned and unearned income
  • Earned income -money earned from working for pay
  • Unearned income -income received from sources other than employment

Payroll Tax

  • A tax on earned income that supports the Social Security and Medicare programs (also known as FICA)

Form of Tax

  • Sales tax- tax on purchased goods and services
  • A percentage added to the original price of an item
  • $1.00 item charged 6% sales tax = $1.06
  • Excise taxes – taxes collected from the seller or retailer and as such often remain hidden in the price of a produce or service

Net Gain

Add more money to savings or another expense

Net Loss

  • Increase income
  • Decrease expenses

Values

A fundamental belief or practice about what is desirable, worthwhile, and important to an individual

Needs vs. Wants

  • Needs – goods or services that are required for survival
  • Wants– the desire for goods and services that can increase our quality of life but are not absolutely necessary for our survival