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

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Chapter 2: Money Management Strategy
Lecture Notes:
Goals:
- Explain how to create a person cash flow statement
- Factors that affect your cash flow
- Creating a budget based on expected, current and future cash flows and forecasted cash
flows
- Create a balance sheet
Key Terms:
- 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
Cash Flow Statement:
- A cash flow statement measures a persons income and expenses
- What it records:
- 1. Record income (money in), this includes salary, interest, dividends, capital gains
- 2. 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
Income
- Factors affecting your job: is it high paying?
- In high demand?
- What level of skills are required to complete the job?
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