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B2-1 PersonalFinanc

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B2-1 PersonalFinanc Powered By Docstoc
					Basic Agribusiness
Principles and Skills



    Unit D1-1
  Problem Area 1

Managing Personal
    Finances
    Lesson 1

 Understanding
Personal Finances
    and Goals
        Interest Approach
 How  much money do you spend in a
  week?
 How do you decide what to
  purchase?
   Student Learning Objectives
 Conduct   budgeting of personal
  finances.
 Develop financial goals.
 Understand how to use and balance
  a checking account.
 Compare characteristics of various
  types of investments.
                Terms
 Bonds              Insured   savings
 Budget               account
 Certificates of     Mutual funds
  deposit             Overdrafts
 Checking account
                      Stocks
 Financial planning
  process             United States

 Goal
                       savings bonds
  Why is Financial Management
           important?
 Knowing  financial standing
 Setting priorities and needs.
 Planning credit needs.
 Tax planning and reporting
 Some disadvantages to personal
    financial management.
 Initial
       set-up takes time
 Regular updating required
               Budget
 Formal written or unwritten plan
 Includes sources of income and
  expenses
       How do I prepare a Budget
 To prepare a budget one needs to
  consider sources of income and
  items purchased.
 A budget categorizes the uses of
  cash as to whether they are a
  necessity or a luxury.
  Six Steps in Financial Planning
 Gather  personal and financial data.
 Establish financial goals and objectives.
 Analyze financial information to identify
  alternatives to achieve goals and
  objectives.
 Develop a financial plan.
 Implement the plan.
 Review the plan on a regular basis.
        Checking Account
A checking account is an account in
 which a user makes deposits and
 may write checks to be paid from
 the account.
    Advantages of a Checking
            Account
 Reduces   need to carry large
  quantities of cash.
 May be able to accrue interest while
  money is in the account.
 Safe way to pay by mail
 Most all businesses accept checks.
          Disadvantages
A  checking account may require
  monthly fees.
 Time is required to balance the
  checkbook
 There may be minimum balance
  requirements.
           Disadvantages
 Stolen or lost checks can result in
 loss of money from the account.

 Large charges are levied against
 overdrafts, when a check is written
 in an amount greater than the
 account balance.
       Styles of checkbooks
 Duplicate check-carbon copy
  remains in the checkbook.
 Stub-information remains in the
  checkbook.
 Safety paper-a watermark that
  makes photocopying obvious.
 Desk set-large binder with three
  checks per page.
      Check writing guidelines
 Write  checks only in permanent ink.
 Always include the purpose of the
  check.
 Avoid leaving space next to the
  dollar sign.
 Void any check with a mistake.
         Balancing Checkbook
 Mark  deposits and checks that have
  cleared the bank.
 Add to the current balance those
  checks that are written but not
  cleared.
 Subtract any deposits made but not
  cleared.
       Balancing Checkbook
 Subtractany service charges and
 add any interest.

 Compare the ending balances in the
 checkbook against the monthly
 statement.
  What types of investments are
           available?
 Insured  savings account
 Savings bonds
 Certificates of deposit
 Bonds
 Mutual funds
 Stocks
      Insured Saving Account
 Available  through banks, saving and
  loans associations, and other
  financial institutions.
 They are insured by a government
  agency.
 They are considered safe &
  convenient.
        Certificates of Deposit
 CDs  are savings certificates worth a
  specific amount of money, for a
  specific amount of time, with a set
  interest rate.
 Usually pays a higher interest rate
  than passbook savings accounts
  and are fairly convenient.
         US Savings Bonds
 Available  through many financial
  institutions.
 Can be purchased through payroll
  deductions.
 Involve investing in the federal
  government by buying bonds with a set
  maturity date at a price below the face
  value.
                 Bonds
 Bonds  are certificates of debt.
 Issued by corporations or
  government agencies.
   Bondspromise payments of interest
   on specific dates.
 Original
         investment is also paid
 back at maturity.
              Mutual Funds
 Investorspool their money.
 Professional money managers
  manage the pool.
                  Stocks
   Stocks represent a share of
    ownership in a company.

 The    value of the stock can increase
    or decrease based on performance
    of the company.
         Review/Summary
 How  would you conduct budgeting
  of personal finances?
 How are financial goals developed?
 How to use and balance a checking
  account.
 Compare characteristics of various
  types of investments.

				
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posted:2/21/2010
language:English
pages:27