1. User-Defined Placeholder Text Chapter 3 Money Management Strategy 3.2

2. Personal Financial Statement Personal Financial Statement- Personal financial statements can help you: Determine what you ____ and what you ____. Measure your _________ toward your _________________. Track your financial __________. Organize _____________ that you can use when you _____________ _____________________________. The 2 types of personal financial statements are called ____________________ and ________________________.

3. Personal Balance Sheet Personal Balance Sheet- Net Worth- Things that go on a personal balance sheet: Assets- Wealth- Liabilities- Net worth

4. Steps to Creating a Personal Balance Sheet Step 1: Determine your Assets Liquid Assets- Real Estate- You would list the property ’ s___________- the price at which the property would sell Personal Possessions- must be valuable (used CD ’ s and old clothes don ’ t count) Investment Assets (retirement accounts, stocks, bonds)

5. Steps to Creating a Personal Balance Sheet Step 2: Determine your Liabilities Current Liabilities- Ex.- Long-Term Liabilities- Ex.- Textbook page 66

6. Steps to Creating a Personal Balance Sheet Step 3: Calculate your Net Worth Step 4: Evaluate your Financial Situation Textbook page 68 Go Figure

7. Cash Flow Statement Cash Flow- Cash Inflow- Paycheck, allowance, interest earned in savings account Cash Outflow- Cash Flow Statement- Net Cash Flow-

8. Steps to Creating a Personal Balance Sheet Step 1: Record your Income Deduction- Gross Pay- Net Pay- amount of income in your paycheck ________ deductions are taken out Discretionary Income- You can spend this money at your discretion. The higher your discretionary income, the better off you are. Step 2: Record your Expenses

9. Steps to Creating a Personal Balance Sheet Step 3: Determine your Net Cash Flow How?- Subtract your EXPENSES from your INCOME Surplus- Emergency fund, savings, investment plans Deficit- Textbook page 70 Textbook page 71 Go Figure