NARRATIVE REPORT
IN
FIN101: PERSONAL FINANCE
CHAPTER 7: Financial Management
, Chapter 7 Financial Management
Introduction
Financial management is about managing and analysing our own personal finances and
financing situation to make decisions. We have two sources of money; yourself or the money
that we borrowed from someone.
You can use your own money if the money that you earn is at least equal your expenses. And if
there is an excess that is what you called a budget surplus. However if your income is less than
your living expenses that is what you called a budget deficit. And you will be needing someone’s
money to fill that in.
Our ability to save is changing every time because we are affected by the changes in our
economy. Micro and macro factors will determine our income and expenses and how we create
our budget.
Unexpected events will turn a saver into a borrower. And that is why understanding and
analysing our own finances is important to create strategic choices for the betterment of our
future.
Financing also includes our business decision if ever we want to have a business in the future.
After all business is also a source of income and can be used to minimize expenses. Business
decision can be influenced by personal factors. Just like the example on our book, a house could
be for personal use and can be the source of income at the same time.
Financial management decision is complicated if we’re going to study everything about it and
all the terms and definitions. But we do it every day, for some people they just do it
unconsciously. It is difficult and frightening because it will determine if we can live comfortably
or not.
Before we proceed, let’s see some quotes or advices from warren buffet that I happen to saw
on facebook. So I assume you already know it but we just include because it really teach a good
lesson on how we handle our money or finances
7.1 Your own money: Cash
In this much it pretty much just tackled the different form of cash or how we save and pay for
our expenses. First there is the checking account, where income and wages are deposited and
you can also use it to pay expenses. Second is the direct deposit, where the money is being
directly deposited. For example you have a saving and a checking account which your wages
will be directly deposited. Automatic payment will automatically pay for your scheduled
expenses. A debit card personally is very convenient for me because as long as it has money
deposited in it you can use it to pay for everything without worrying to pay later, it’s literally a
cash in a form of card. And ATM is a card used to conveniently withdraw money.
IN
FIN101: PERSONAL FINANCE
CHAPTER 7: Financial Management
, Chapter 7 Financial Management
Introduction
Financial management is about managing and analysing our own personal finances and
financing situation to make decisions. We have two sources of money; yourself or the money
that we borrowed from someone.
You can use your own money if the money that you earn is at least equal your expenses. And if
there is an excess that is what you called a budget surplus. However if your income is less than
your living expenses that is what you called a budget deficit. And you will be needing someone’s
money to fill that in.
Our ability to save is changing every time because we are affected by the changes in our
economy. Micro and macro factors will determine our income and expenses and how we create
our budget.
Unexpected events will turn a saver into a borrower. And that is why understanding and
analysing our own finances is important to create strategic choices for the betterment of our
future.
Financing also includes our business decision if ever we want to have a business in the future.
After all business is also a source of income and can be used to minimize expenses. Business
decision can be influenced by personal factors. Just like the example on our book, a house could
be for personal use and can be the source of income at the same time.
Financial management decision is complicated if we’re going to study everything about it and
all the terms and definitions. But we do it every day, for some people they just do it
unconsciously. It is difficult and frightening because it will determine if we can live comfortably
or not.
Before we proceed, let’s see some quotes or advices from warren buffet that I happen to saw
on facebook. So I assume you already know it but we just include because it really teach a good
lesson on how we handle our money or finances
7.1 Your own money: Cash
In this much it pretty much just tackled the different form of cash or how we save and pay for
our expenses. First there is the checking account, where income and wages are deposited and
you can also use it to pay expenses. Second is the direct deposit, where the money is being
directly deposited. For example you have a saving and a checking account which your wages
will be directly deposited. Automatic payment will automatically pay for your scheduled
expenses. A debit card personally is very convenient for me because as long as it has money
deposited in it you can use it to pay for everything without worrying to pay later, it’s literally a
cash in a form of card. And ATM is a card used to conveniently withdraw money.
