Money Management Guide

By Meredith Robinson

Whats this About?

This is a guide to money management. All things you need to know about depository institutions, taxes, spending plans, statement of financial positions ,and income and expense statements. Read on to find ten of the most important concepts about these topics.

1. Statement of Financial Position

A statement of financial position is a financial statement that describes a family's or an individual's financial position on specific dates by showing assets, liabilities, and net worth. What is my financial position today?

2. Depository Institutions

A depository institution is are businesses that provide financial services. Examples of depository institutions include credit unions and commercial banks.

3. Spending Plans

A spending plan is an income and expose statement sometimes referred to as a budget which records both planned and actual income and expenses over a period of time. What is my future money management plan?

4. Taxes

Taxes are a sum of money demanded by a government itself as well as specific services or facilities. Taxes are paid by taxpayers, taxpayers are people who pay taxes to national, county, state or municipal governments.

5. Income and Expense Statement

An income and expense statement is a list and summarizes income and expense transactions that have taken place over a specific period of time, usually a year or a month. How have i managed my money in the past?

6. What are the differences between Commercial Banks and Credit Unions

Commercial Bank- A for profit bank that is open to anyone who wants to utilize a depository institution. Commercial banks offer numerous financial services and usually are the largest depository institutions.

Credit Unions- A not for profit group of members that safe a common bond. Credit Unions offer many services but usually not as many as banks, credit unions are also able to pay higher interest rates and charge lower fees.

7. Spending Plan development Process

There are three steps to the spending plan process.

Step 1- Track current income and expense.

Step 2- Personalize your spending plan.

Step 3- Allocate money to each category.

There are two steps to maintaining the spending plan.

Step 1- Implement and control.

Step 2- Evaluate and make adjustments.

8. What are the components of a Statement of Financial Position

There are three components to a statement of financial position.

1. Assets- An asset is everything a person owns with monetary value.including monetary assets, tangible assets, and investment assets.

2. Liabilities- A debt or obligation owed to by others.

3. Net Worth- Your net worth is your assets minus your liabilities and that equals your net worth. The higher the net worth the wealthier.

9.What are the components of Income and Expense statements

There are three components.

1. Income- The money received, including earned income, unearned income and income received from government programs.

2. Expenses- The money spent including, taxes, saving and investing, insurance, housing, transportation, food ,and others.

3. Net gain or Net loss- Income minus expenses equals net gain or net loss. If you have a net gain use that money for savings or other expenses. If you have a net loss increase your income and decrease your expenses.

10. How do Taxpayers pay taxes and what are the Benefits

Taxpayer pay taxes by paying income tax, excise tax, payroll tax, sales tax and property tax The benefits of paying taxes are roads, libraries, military for national security, government assistance programs, public schools and universities, police and fire departments, recreation such as parks and trails and political leaders and government.