Financial Management- Organization Effec

FInancial Management

1. FINANCIAL
MANAGEMENT

2. Learning objectives
2
Budgeting organizing
Avoid from
Wasteful Spending
Savings
Understanding
Money
Management

3. Definition of a Budget
•
“A finance plan that allocates future
personal income toward expenses,
savings, and debt repayment.”
Budgeting, Budgeting Fundamentals & Overview -Money Management PowerPoint Presentations

4. •Gives you control over your money
•Keeps you focused toward your financial goals
•Helps you stay aware of where your money goes
•Helps you save for expected and unexpected costs
•Clarifies areas where you can save money
Benefits of Benefits
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5. Three Main Components of a Budget
Income
•
Money you earn from a range of sources.
Expenses
•
Outgoing funds you pay to others
Savings
•
Anything you have left over after paying your expenses.

6. A Budget Tells us what we can’t afford,
but it doesn’t keep us from buying it.
William feather
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7. Steps to make a
Budget.
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8. •Include all Fixed bills such as rent, electricity
and gas bills etc.
•Subtract these bills from your income then you
know how much you left.
•Save left money for emergency financing
situation.
•Make Asset debt statement
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9. What Happens if you Don’t Budget
•
Overspending•
Falling into a debt cycle•
Limited spending power
•
Limited savings and investments
•
Lack of future security

10. Three Components of a Savings Plan

11. Emergency Fund
•
Should be liquid (easily converted to cash)•
Equal to at least 6 months of your essential living
expenses
•
Those in downsizing or highly competitive industries
should save more
•
Be prepared for a market collapse
•
Cushion for handling unexpected expenses

12. Simple Emergency
Fund Calculation
•
A simple calculation is to
multiply your monthly
financial needs by 6

13. Advanced Emergency
Fund Calculation
Consider the amount of time it
would take you to replace your
income source if that source
were lost. Set aside at least 6
months’ worth of expenses,
plus expenses for the time it
would take to replace your
income source.

14. Short-term Savings
•
Money set aside for
fun things now
•
Enjoy the fruits of your
labor
•
Provides near-term
gratification without
going into debt
•
Gets you in the habit
of evaluating and
prioritizing your wants

15. Long-term Savings
•
Money for future investments
•
Long-term financial plans, such as
retirement
•
“Pay yourself first”
•
Target 10% of your take-home
income
•
Increase the amount over time
•
Use automatic transfers to make
long-term savings routine

16. •Keep your bills in one place.
•Have one file for income and other for
spending's.
•Note down when bill payed
.
Organization of Money
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17. Avoid from Wasteful Spending's
•Take your lunch to work daily.
•Bring your own soda or bottle water to work instead of
buying
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18. Savings
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•The money one has saved, especially
through a bank or investment plan.
•Set aside money each per day for saving
•It helps you to make a easy financing at
emergency situation or for Travelling/tour

19. Life isn’t
always
smooth
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Emergency
Fund

20. Steps of Management of Money
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21. •Record all your expense on paper or spreadsheet.
•Review your each month expense.
•Buy what you need , not what you want.
•Make it habit to check your bank ,credit and saving
statement.
•Try/strive to own a house instead of renting.
•Avoid from bank loans because they charge interest
on it.
Money Management
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22. •Stay away from short cuts to wealth such as
gambling and other schemes to make rich.
•Seek a financial adviser to help you plan your
finances and investments.
Money Management
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23. Thank you
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