COMMERCE 4FP3 Lecture Notes - Lecture 2: Cash Flow, Cash Flow Statement, Savings Account

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 4FP3
• Professor: Jordan Fortino

Document Summary

Explain how to create a person cash flow statement. Creating a budget based on expected, current and future cash flows and forecasted cash flows. Smart goal: shorter term and easy to attain. Inspirational goal: longer term, something you strive for. Cash flow statement: the money you have spent or saved during a month. Balance sheet: your current financial situation at a given time. Financial budget: the planning and spending of your savings to achieving your financial goals. A cash flow statement measures a person s income and expenses. Record income (money in), this includes salary, interest, dividends, capital gains. Record expenses, like rent, credit card, cell phone etc. Using cards are an easier way to track your expenses. Your net cash flow is your income minus your total expenses. Age, the more people living under one roof, the more expensive the cost. Cost of living/spending habits (spending your whole pay check or only buying necessities)