1. Explain how the use of a Daily spending Diary could result in starting an investment program.
Through the use of Daily Spending Diary we are able track how we are spending our money. It also allows us to manage short and long term goals. Tracking what your spending your money will let you see if your spending money on unnecessary object. For example if you’re spending less money eating at home then eating outside you can consider eating at home more than eating out side. Money management referred in the book is the day-to-day financial activities necessary to manage current personal economic resources while working toward long term financial security. Thus a Sending Diary allows us to be in track of one day being financially secured. When we are keeping track of what we are spending there is bound to have some extra money lest so in that case we might want to invest money on something beneficial like a stock. Therefore with the help of Daily Spending Diary it can result in starting an investment plan.
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2.
Based on your Daily Spending Diary, describe actions that you might take to identify and achieve various financial goals.
Based on my Daily Spending Diary, best course of action that I must take is eating out less in order to save more money. I also have to learn to identify the needs over want. For example spending $172.00 on shoes when I am not financially independent was pretty fool choice. Also threw this Daily Spending Diary I will be able to save money for a car. Therefore I must eat out less and save money in order of me to achieve various financial
goals.
People spend money the way they want to spend it; they forgo expert advice and instead, rely on their own intuitions and judgments when making a purchase. However, the opposite occurs in all other aspects of dealing with money. They pay high sums of money for experts to advise them on how to save their money and before they invest their earnings. Elizabeth Dunn, an associate professor of psychology at the University of British Columbia, and Michael Norton, an associate professor of marketing at the Harvard Business School, decided that spending money should not be considered an “easy” task and wrote a book of expert advice on how to spend money. Using behavioral science research, Happy Money: The Science of Smarter Spending focuses on the relationship
There may have some short term goal and long term goals depending on the time frame we set out. Setting a financial goal should be serious and a realistic goals because we could fall out with every goals if we have no outstanding set of goal. For example; I want to become a network security but I have no financial support or set of goal, I would not make my dream to come true. The finance follows everything that we do in order to success. Without a financial goal, it is like climbing on a tree without ladder. During my short term goal, I decided to save money as much as I could to support for myself. I also could get help from my families but I do not want to rely on them. I only accept their support for activities such as taking vacations. I decided to save money for my college and retirement plan by myself since I could able to work on full-time or part-time jobs. Financial goal also require prioritizing times and managing skills. As for myself, I need to know where the money come from and where it going in order to track my financial goal. I have to decide which is important or urgent, do I want or needed. I would not care if something that I do not seriously need for anything that doesn’t relate to my goal. I always have to figure out an accurate amount of money I spend and talk to my family if I need help. I could also go and talk to the Donnelly Financial Aid Advisor to let me know how my financial aid will reflect on the classes that I would take. I also set my retirement plan as a long-term goal, so I am going to start before reaching my short term goal by little as little. I believe I would be able to save money for retirement of the next fifty years if I save day to day or month to month
This chapter covers several tools that can help in your financial planning. The first step is to create a budget. The textbook went into great detail on the different budgets that can be used and their benefits. A budget will review your current financial condition and help you to project realistic choices. These choices can be for immediate or longer term goals. While there are some uncertainties in future projections, your chances of reaching financial goals without one is like rolling the dice. One key is to be conservative in your planning; this helps address the unexpected when they occur.
In addition, I will practice what we have learned in class this semester. I will follow Dave Ramsey’s five foundations to financial success. As soon as I get out of college I will start saving as much as possible to start a three months of expenses emergency fund. Next, I will attack debt with all I can using the debt snowball method, paying off my smallest debts first and then contributing that money to bigger debts until I am debt free. Next, I will save and pay cash for all major purchases such as a car or a house. I will never pay for something unless I can pay cash for it. However, if I do need to get a house mortgage I will finance it with a fifteen-year fixed rate mortgage. This way I will never go into debt trying to pay for something. I will be able to save more money while still having nice things. Finally, I will
Making improvements on our financial literacy results in a wave of impacts on our economy and the financial health in our society because of responisble behiavior with our finances. These modifications to our behavior are neccesary because it let's us address primary cultural problems, for example over-credits on your purchases, mortgages possibly resulting in debt, dealing with expectations on inflation and also planning on your retirement.
Making a personal budget can be a very simple or a very arduous task, depending on how one goes about it. One must find stable monthly expenses, such as rent, and manage the rest of their income around that amount. Depending on the steps an individual takes, this can be a very simple process. For this project, I was assigned to make three personal budgets for three different situations. This paper will outline the first.
Many students in grade school don’t obtain money very often because they do not have a steady income, so they are prone to spend the money they get. For example, if a student gets money for a holiday, the first thing that comes to mind is to spend it on something they want because they are not used to having money. They don’t know the next time they will get more money so they don’t see the importance of saving. Since there would be a constant income a student will see the effect of saving because their amount of money would constantly be increasing which will motivate them to keep saving. If students learn how to save while they are younger they will be more successful in life, and they will also have that money to use when they graduate.
In conclusion, the best way to manage your money is to keep a budget and record all your transaction to see where your money is going. Living with a budget isn’t the easiest thing in the world, but it can be a great alternative to worrying about how you are going to pay for your expenses. Budgeting allows you to create a spending plan for your money; it ensures that you will always have money for the things that are important to you. Following a budget will also keep you out of debt. If you don’t balance your budget and spend more than you make, you will have financial problems. Many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year.
Developing a thorough financial plan is a process that comprises a comprehensive analysis of a particular individual’s financial position and their long-term commitment to apply and observe the set financial plan through one’s life. The plan includes but not limited to, how an individual spends, saves monies and invests his or her financial assets. It encompasses knowing how to budget, manage cash and taxes, borrowing of funds, the use of credit cards, minimizing risk, investing and planning for retirement. Such a plan also requires a vigilant thought process for the future so he/she can tweak their financial plans as needed due to changes in lifestyle and economy.
When growing up, I heard over and over from my parents to save my money. Most times this was encouraged in order to ensure that I wait to spend my money when I needed it. Although this was a main concept that I heard while growing up, it seems as though in today and age, saving is not the right way to go. There are many opinions about the idea of people saving their . The economist illustrates their opinion in the article “The Bias against saving” by Buttonwood. In this article, the main idea is the thought that individuals should be saving because those savings are needed to spread among other places in the economy.
During all these years living by my own and having my own family I will have years of experience managing the money I earn. That is why, I found it essential to dedicate some lines in this assignment to describe well of I will like to invest my money on and what I consider a good investment like. Since I was little I believe that the best investment you can do is in education. The education I am talking about is not only high school or college is also includes a psychology in the case of needed, a travel to learn languages and culture… This is the type of education that I believe and I will be willing to pay for it. Some people will find that eating well or dressing correctly is a good investment they can do. But in my opinion the education of my family is a priority to put my money on.
Personal financial planning is important because it helps you prepare financially for the future. My first short-term financial goal is to have an 8-month emergency savings account. This class helped me understand the important steps needed to achieve my financial goals. “Successful financial planning requires specific goals combined with spending, saving, investing, and borrowing strategies based on your personal situation and various social and economic factors, especially inflation and interest rates” (Kapoor, Dlabay & Hughes, 2012). First I evaluated my spending habits. This allowed me to see where I was
Besides, different cultural between races also play a major role in spending habits. Example, Chinese may spent large money on a wedding while another culture may not spend much at all. Someone raised in great wealth may have spending habits that are very different from someone raised poor. Furthermore, our own unique personality and experiences also play a role. Example, two siblings growing in the same environment doesn’t mean the siblings have the same interest and the spending habits it is because one might be a saver while the other may be a spender. This includes other forces such as different gender might have a different kind of view and perceive. Last but not least, the media also has a role in how we spend and save. Example, thinking about the spending habits of the characters when we saw on TV as we were growing up till today. Did they thinking about their retirement fee for their future? By examine the student’s habit, we will look into few categories which are entertainment, education fees, food and drinks and transport. By define entertainment, students are spending on games, shopping, electronics, even cafe all are costly
In conclusion always think about how to spend your money rather than how to earn. Be cautions of products and think of how much you want to spend on a specific product always asses what you need and this of how to refrain from impulse buying. Don’t deprive yourself from buying what you love, instead budget yourself and think according. Separate you necessities from other luxuries. If you balance out your spending and savings saving money would definitely get easier. Saving money is being able to control and know how to spend your money wisely.