1. Budgeting and Cash Flow Management

2. Objectives
Describe the relationship between financial planning and budgeting.
Understand how to set and achieve long-and short-term financial goals.
Establish the structural and mechanical aspects appropriate for your personal budget.

3. Objectives Resolve conflicting financial needs and wants.
Describe the key aspects of the implementation phase of budgeting.
Illustrate the methods and techniques to keep income and expenditures within planned budget totals.

4. Objectives Perform the tasks of the evaluation phase of budgeting.
Explain the techniques of talking effectively about money.

5. Budgeting and Cash-Flow Management
IF YOU FAIL TO PLAN,
YOU PLAN TO FAIL!
To succeed in money matters requires implementation of financial plans.

6. Financial Planning and Budgeting
Values
Goals

7. Comparison of Statements
PRESENT
Balance Sheet
PAST
FUTURE
Income and Expense Statement (Cash Flow Statement)
Budget

8. Six Phases of Budgeting
Achieve success in financial goals
Evaluate
Control
Implement
Decide
Monitor, review, revise after each period.
Organize
Set Goals

9. Financial Goal-Setting Phase of Budgeting
Setting long-term goals—anything more than 12 months away.
Developing short-term goals from long-term goals
Prioritizing goals
Making goals time and dollar specific

10. Organization Phase of Budgeting
Select recordkeeping format
Use cash or accrual basis
Select budget classifications
Select time periods

11. Decision-Making Phase of Budgeting
Inflation and other economic factors
Realistic budget estimates
Reconciling initial estimates

12. Implementation Phase of Budgeting
Recording actual income/expenditures
Managing with a cash-flow calendar
Utilizing a revolving savings fund
Calculating time-period totals

13. Control Phase of Budgeting
REASONS FOR BUDGET CONTROLS:
Stay on target
Check progress
Be alert to problems or errors

14. Control Phase of Budgeting
BUDGET CONTROL MEASURES:
Use a checking account
Employ a credit control sheet
Check accuracy
Monitor unexpended balances

15. Control Phase of Budgeting
BUDGET CONTROL MEASURES:
Justify exceptions
Use the envelope system
Employ subordinate budget
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16. Evaluation Phase of Budgeting
Compare estimated and actual amounts
Decide how to handle balances
Assess progress toward goals

17. Discussions About Money
MONEY MANAGEMENT AND FINANCIAL DECISION MAKING FOR COUPLES:
Unilateral
Shared
Divided
Copyright © 2000 Houghton Mifflin Company. All rights reserved.

18. Discussions About Money
COMPLICATIONS FOR DUAL-EARNER HOUSEHOLDS:
More income/more expenses
Reliance on “second” income
Discretionary account for each individual

19. Discussions About Money
COMPLICATIONS BROUGHT BY REMARRIAGE:
Child support
Alimony
His/Her/Our children
His/Her funds

20. Discussions About Money
Freedom
Trust
Self-esteem
Guilt
EMOTIONS AND MONEY:
Indifference
Envy
Security/Comfort
Power/Control

21. Talking About Financial Matters
Get to know yourself and partner
Learn to manage disagreements
Use “I” not “you” statements
Focus on commonalties
Be honest

22. Develop Money Sense in Children
Give access to money
Give freedom to save and spend
Teach responsibility
Allow freedom to fail
Talk about family finances

23. Your Personal Spending Style
Givers
Me-spenders
Big-spenders
Tightwads
Normal People

24. Couples Should Discuss Personal Finances
Child bearing
Employment
Food and clothing
Housing and transportation
Recreation and vacations
Future security and debt