MONEY MANAGEMENT

PHILOSOPHIES
Objectives:

Enumerate money (ABM_BF12-IVo-p-

management 26 Quarter 2 week
philosophies 3-4
The Basic Protection is Knowledge

The first step to getting your personal finances under control is to have
a clear understanding of where you are now. Determine and list your
assets, liabilities and expenses.
Nothing Happens without a Plan
Individuals should also practice financial planning to achieve the set
goals and objectives. One must learn to practice budgeting to properly
account one’s resources.
The Time Individuals must see the importance of

Value of
investment. One may invest his resources
through debt reduction, bonds, banks,
pension plans, active businesses, real estate,
stock market and mutual funds.

Money
 Before entering into an
investment, learn to analyze first
the impact of taxes in it. Almost
Taxes Affect 1/3 of the company’s or
individual’s income will go to
Personal Finance taxes, thus; learn to compare the
returns of your potential
Decisions investment after tax basis.
Stuff Happens, or Remember to liquidate your assets

the Importance of (cash and cash equivalents).

Liquidating assets will allow the
individual to cover unexpected

Liquidity
needs and expenses. Not
liquidating assets will lead the
individual to a fund irregularity and
chaos.
Waste Not, Want Not
– Smart Spending
Matters/Live below
your means
This is the only way to ensure you save
and grow your net worth.
Insure your needs
• It provides another margin of safety. Most importantly, insurance is
not a primarily vehicle for creating wealth, merely protecting it.
Risk and Return Go Hand in
Hand
One must have to understand that to gain a higher return, he must face
certain risks.
Mind Games and Your Money
The secret is to always find a way to discipline yourself in managing
your personal finances to meet your long term objectives in life while
still enjoying life to the fullest without sacrificing all your resources.
 MONEY
MANAGEMENT
CYCLE
Money management
the process of budgeting, saving, investing, spending or otherwise
overseeing the capital usage of an individual or group
Essential Terms/Ideas:

Cash- money in forms of currency, checks and debit cards as distinct from checks, money or
credit
Short- term goal- something achievable in 12 months or less
Long term goal- something that takes a long time to accomplish
Opportunity Cost- the loss of potential gain from other alternatives when one alternative is
chosen
Credit- borrower receives something of value now and agrees to pay later
Budget- a financial plan for a defined period
Money Management Cycle

Spending
70%

Earnin
g 100%
Investin Saving
g s
15% 15%
SPENDING- paying out (money) in buying or hiring goods or services.
INVESTING- is allocating money in the expectation of some benefits in the
future.
In finance, the benefit from an investment is called a return
SAVING - is income not spent, or deferred consumption
Methods of saving include putting money aside in, for example, a deposit
account, a pension account, an investment fund, or as cash.
EARNING - is the amount of money that someone is paid for working.
It is the amount of profit that a business produces during a specific period
Tips on Money Management Success
1. Build savings. This step involves allocating a portion of your income to a

saving/investment fund.

2. Pay bills on time. This step involves avoiding late payment charge and high interest

debts to build a positive credit standing.

3. Pay more than the minimum payment. This step involves minimizing interest charge

on outstanding debts.

Minimum payment- is the amount that needs to be paid to avoid late payment charges.

4. Research for the best deal. This step involves comparing process of different vendors

before making a purchase.