ASSETS – LIABILITIES = EQUITY the difference between the value of the assets and the value of the liabilities of something owned ASSETS – LIABILITIES = EQUITY

Buying plan Is an organized method for making good buying decisions. It helps you stretch your limited resources. It will also help prevent “buyer’s remorse”, which is regret over buying decision you have made. When you make a major purchase or spend a large sum of money, a buying plan can aid in the decision-making process. A buying plan is a more detailed extension of a budget

Step 1: Define your spending goal Items you buy should be selected to meet your wants and needs. By evaluating your wants and needs before you shop, you will be better prepared to make good buying decisions. Because your resources will likely be limited, you should consider the Opportunity Cost Of the item. What other items must you forego buying in order to buy this item? Consider how the item relates to meeting the goals you have set in your budget

Step 2: choose the item to buy Choose items that will meet your goals. This may include new or used, high-quality, or high, medium, or low-cost choices. You may also consider renting instead of buying

Step 3 define criteria STANDARDS OR RULES BY WHICH SOMETHING CAN BE JUDGED. FOR AN ITEM YOU WANT TO PURCHASE, THE CRITERIA WOULD BE THE DESIRED, FEATURES, FUNCTIONS, AND QUALITY OF THE ITEM. LIST THE CRITERIA THAT YOU WOULD CONSIDER ACCEPTABLE BEFORE YOU SHOP FOR THE ITEM

STEP 4: SET A TIMELINE DETERMINE WHEN IS A GOOD TIME TO PURCHASE DESIRED ITEM FACTOR IN TIME OF YEAR, SALES AND PERSONAL BUDGET

STEP 5: SET A SPENDING LIMIT THE MAXIMUM AMOUNT YOU ARE WILLING TO PAY FOR AN ITEM BASED ON THE NEEDS/WANTS THAT IS BEING MET, HOW MUCH MONEY ARE YOU WILLING AND ABLE TO SPEND BY SETTING A SPENDING LIMIT, YOU WILL NOT BE TEMPTED TO SPEND MORE THAN YOU HAVE PLANNED