Money Management Guide
Tyler Carson
Depository Institutions
The two types are Commercial Banks and Credit Unions:
Commercial banks are for-profit and allow anybody to join them, while Credit Unions are non-profit and require you to become a member to use their services.
Depository Institutions offer the ability to earn interest. They also offer checking accounts and savings accounts for their customers.
Some larger depository institutions offer online and mobile banking, allowing you to interact with your money on the go and on the computer.
Taxes
Some tax "communities" are United States, state, county, and city/town.
Taxpayers pay Sales Tax, Excise Tax, Income Tax, Payroll Tax, Property Tax
Income Tax is split into Federal Income Tax and State Income Tax.
Taxpayers also pay for Social Security, which is income for retirees, people with disabilities, and more.
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.
The three components are Assets, Liabilities, and Net Worth.
An asset is everything a person owns with monetary value.
A liability is a debt or obligation owed to others.
Assets - Liabilities = Net Worth
You can increase your net worth by increasing your assets, decreasing your liabilities, or a combination of both.
Income and Expense Statement
Three Components: Income, Expenses, and Net Gain/Net Loss
Income - money received.
Expenses - money spent.
Income - Expenses = Net Gain/Net Loss
The Income and Expense Statement tells you where your money is coming from and where it's going and uses a tracking method that works for you depending on how you make the Income and Expense Statement.
Spending Plan
A spending plan is important because it can help increase net worth, helps manage your money in a positive manner, helps set and reach goals, and more.
The intended time period for your spending plan is usually concurrent with your pay period.
The Spending Plan Development Process
Step 1: Track current income and expenses
Step 2: Personalize your spending plan
Step 3: Allocate money to each category
Step 4: Implement and control
Step 5: Evaluate and make adjustments