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I will keep this as short as possible. A lot of this is common sense. It has to do with managing money and taking control of your finances.
Keeping your personal financed under control will bring you a lot of peace in your life.
Here are some tips on controlling your finances. Know your bank balance, Know what you spend, Don't buy on impulse, Make a budget.
It is so important to get into the habit of controlling and keeping track your finances.
Especially with those of you that are just starting out on your own.
The key to success in meeting financial challenges to make sure you always control them rather than letting them control you.
Make sure you keep track of your finances. This requires dilligence.
To make a budget.....list income, list expenses and subtract these to determine your Net Cash flow.
Always want your Net Cash flow to be positive. We will discuss what you can do if your Net Cash flow is negative.
Here are some questions to think about. I know we are not in class and I can't get your immediate feed back and comments but.....
Here are some ideas that my previous students came up with regarding these questions.
Question 1. Why is it important to understand your finances?
Peace of mind,
Make good and wise decisions
Educate your children.
Question 2. List 4 crucial things you should do if you hope to keep your finances under control.
Some of the ideas they came up with were....
Create a Budget,
Spend less than you make (obviously),
Don't impusle buy.
These are some comments my previous students made.
Question 3. What can a person do if they have a positive monthly cash flow? Negative monthly cash flow?
If you have a Positive cash flow....
you can save,
you can invest
you can make extra payments, which is always a good idea!
What if you have a Negative monthly cash flow..... You are spending more than you are making. You have problems!!
Make some cut backs!
Or just Cut Back.
Lets look at several examples to help you understand personal finances.
Example 1. Read the example.
Lets look at a comparison. I get 400 miles a week in a car that gets 18 miles per gallon.
I need to know how many gallons am I consuming with this 400 mile commute.
400 divided by 18 will tell me how many gallons I will use.
400 divided by 18 will tell me how many gallons I will use.
This comes to 22.2 gallons.
Using the $3 per gallon cost.
The cost of driving this car that gets eighteen MPG would have been about $66.66
What if we had one of the cars that got 50 miles per gallon?
I still travel 400 miles per week but I would divide by 50 rather than 18 to determine the number of gallons of fuel.
I still travel 400 miles per week but I would divide by 50 rather than 18 to determine the number of gallons of fuel.
400 divided by 50 is 8 gallons.
We will still go with a $3.00 per gallon rate. So we would be spending quite a bit less.... actually we would spend $24 a week on gas
as opposed to $66.00. Those cars that get really great gas mileage can pay off!!
Example 2: It does add up!
Consider some of the daily/weekly indulgences you might have in your life.
We will base our calculations on the standard 52 weeks in a year and 365 days in a year.
Take some time to make these calculations. Oops, there goes my phone. Let me take this call.
I'm glad I took that call. Anyway, this types of calculations can be eye opening!
Pause the video right now and determine the values for parts a-g.
Once you have completed your calculations, restart the video.
Compare your numbers to the numbers you