Ch 2: Money Management Skills

About This Chapter

Study these lessons to become familiar with the concepts, processes and terminology involved in managing money. In the Money Management Skills chapter of this study guide, you will review budgeting, cash flow statements, balance sheets and more.

Money Management Skills - Chapter Summary and Learning Objectives

Money, how we acquire it and what we do with it, is a force that dominates many aspects of our daily lives, if not necessarily all of them. Living without it is at best difficult and at worst horrific, but living with it has its pitfalls as well. The lessons in this chapter examine the many facets that, when put together, can form a sound money management strategy. Read on to learn more about the following:

  • How fiscal and monetary policy may affect you
  • The merits of sound budgeting and wise spending habits
  • How to develop a cash flow statement and set financial goals
  • How energy efficiency in the home saves money
  • What bankruptcy is, the types of bankruptcies and more
  • Procedures for calculating net worth, understanding liquidity, etc.

Course Topics

LessonObjective
Effects of Fiscal & Monetary Policy on Personal Finance Define and distinguish fiscal and monetary policy, discuss its impact on your own finances.
Calculating a Personal Cash Flow Statement Examine and compute cash flow, design a cash flow statement.
Personal Balance Sheet: Uses & Examples Assess the applications of a personal balance sheet.
Financial Goal: Definition & Examples Explore financial goal-setting and steps to achieve your goals.
How to Create a Personal Budget: Tools & Examples Design a workable budget and employ sound budgeting principles.
Importance of Allowance in Personal Budgeting Evaluate the significance of assigning an allowance for personal spending.
Spending Money Wisely as a US Consumer Critique your current spending habits and make sound monetary decisions.
Household Budgets & Personal Financial Management Assess the impact of family and home-related expenses on a budget.
Preparing & Responding to Changes in Income Discuss how to prepare for income fluctuations or unexpected liabilities.
Conserving Energy at Home: How to Be More Energy Efficient Discover how to save money by reducing energy costs.
Net Worth: Personal Assets & Liabilities Calculate your net worth using what you have vs. what you owe.
Money Management: Liquidity & Credit Explain what is meant by liquidity, money and credit management.
Personal Bankruptcy: Law & Types Analyze and compare Chapter 7 and Chapter 13 bankruptcy.
Creditor Rights in Bankruptcy Evaluate the rights of a creditor in a bankruptcy case.

9 Lessons in Chapter 2: Money Management Skills
Test your knowledge with a 30-question chapter practice test
Financial Goal: Definition & Examples

1. Financial Goal: Definition & Examples

In this lesson, you will learn what financial goals are as well as look at some examples. Goal length and the steps to achieving financial goals will be discussed.

Calculating a Personal Cash Flow Statement

2. Calculating a Personal Cash Flow Statement

Cash is king. You can budget based on expectations, but you also need a way to track the actual amounts of cash you bring in and put out. In this lesson, we'll learn how to build a cash flow statement.

Personal Balance Sheet: Uses & Examples

3. Personal Balance Sheet: Uses & Examples

A balance sheet is one of the primary financial statements you can adapt to your personal finances to gauge your financial health. In this lesson, we'll discuss what a balance sheet can tell you and how to prepare your own.

How to Create a Personal Budget: Tools & Examples

4. How to Create a Personal Budget: Tools & Examples

Creating a personal budget doesn't have to be overwhelming or discouraging. There are four basic steps to create an effective budget. This lesson will walk you through the steps to create a solid budget.

Importance of Allowance in Personal Budgeting

5. Importance of Allowance in Personal Budgeting

An allowance can help a person maintain a balanced budget while still having a bit of fun. Let's look at how to set one up and how to stay on track to meet personal finance goals.

Spending Money Wisely as a US Consumer

6. Spending Money Wisely as a US Consumer

This lesson explores steps necessary to become a wise consumer within the United States. It highlights the importance of a budget, the necessity of planning purchases, and how to protect yourself and your purchases.

Household Budgets & Personal Financial Management

7. Household Budgets & Personal Financial Management

In this lesson, we'll explain and define the components of a budget: income, expenses, and discretionary income. You'll also learn how to categorize income and expenses as fixed or variable.

Preparing & Responding to Changes in Income

8. Preparing & Responding to Changes in Income

This lesson will discuss how to prepare for changes in household finances due to fluctuations in income. Ups and downs in finances can result from issues like job loss, disability, death, or from more positive events, such as a promotion or new job.

Net Worth: Personal Assets & Liabilities

9. Net Worth: Personal Assets & Liabilities

In this lesson, we'll discuss the components of a balance sheet: assets, liabilities and net worth. We'll define each, discuss the sub-categories and provide examples.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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