1. Topic 4 – Allocating Your Money
Wealth Management
2010

2. Determine Your Personal Net Worth
Definitions: assets, liabilities, net worth
Identify personal assets
Identify personal liabilities
Calculation of personal net worth
Knowing personal net worth can be beneficial
Prepare personal net worth statement
Assets – things you own; cash, furniture, bikes, DVDs, machinery, land, houses, cars, etc.
Liabilities – things you owe; home mortgage, car loan, college loan, credit card balance, etc.
Personal Net Worth – assets – liabilities.

3. How to Go Broke Like a Rock Star
Who do you think is the wealthiest rock star?
What makes him/her the wealthiest?
Is the rock star who made the most money this year necessarily the person who is the wealthiest? Why or why not?
How could a rock star who sells out concerts and is at the top of the charts go bankrupt?

4. The NFL and VISA© Financial Football Revenues Assets Liabilities
Expenses
Activity
Handout – Module 1

5. Develop a Personal Budget
Definitions: personal budget, income, expenses
Common personal income and expenses
Distinguish between fixed and variable expenses
Importance of a personal budget
Steps for developing a personal budget
Tracking and analysis
Personal budget – a sum of money allocated for a personal reason; a summary of expenses for personal reasons.
Income – the amount of money received from working; the financial gain (earned or unearned) accruing over a given period of time.
Expenses – outflow of money to pay for goods and services.

6. Steps to Develop a Budget
Calculate how much income you bring home each month
Determine what your spending habits are
Decide what are most important to pay each month and set money aside for them
Set aside 10% of your income for savings
Take your budget seriously

7. Tracking and Analysis Answer these questions monthly:
Does your budget include all costs expenses?
Are the costs fixed, variable, or one time?
Were there any unexpected emergencies that required an outflow of money?
Are there costs that could be cut?
Calculate what you earned and what you spent to see how close to your budget you ended up
Adjust your budget as needed

8. Activity