2. 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. Create and implement a budget, cash flow statement, and balance sheet.

3.  IF YOU FAIL TO PLAN,  YOU PLAN TO FAIL!  To succeed in money matters requires implementation of financial plans.

4. Financial planning Budgeting Values Goals

5. 1.Personal Financial Records 2.Personal Financial Statements 3.Budget (Spending Plan)

6. PAST Income and Expense Statement (Cash Flow Statement) PRESENT Balance Sheet FUTURE Budget

7. Set GoalsOrganizeDecideImplementControlEvaluate Achieve success in financial goals Monitor, review, revise after each period.

8. 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

9. Select recordkeeping format Use cash or accrual basis Select budget classifications Select time periods

11. Inflation and other economic factors Realistic budget estimates Reconciling initial estimates

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

13. Stay on target Check progress Be alert to problems or errors REASONS FOR BUDGET CONTROLS: Only 58% of young adults pay their bills on time. National Foundation for Credit Counseling

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

15. Justify exceptions Use the envelope system Employ subordinate budget BUDGET CONTROL MEASURES:

16. Compare estimated and actual amounts Decide how to handle balances Assess progress toward goals

17. Take Home Pay-Net Pay Discretionary Income-Less than 5% for people under 25

18. Fixed Expenses Variable Expenses

19. Surplus Deficit Budget Variance Emergency Fund