MCS 2100 Chapter Notes -Cash Flow Statement, Financial Plan, Financial Statement

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 2100
• Professor: Jian Zhao

Document Summary

Personal financial planning- the process of managing your $ to achieve personal economic satisfaction. Determine current financial situation- income, savings, living expenses and debts. Develop financial goals- analyzing values involves identifying what beliefs you hold with respect to money and how these beliefs lead you to act in certain ways. Continue course of action; keep saving same amount, expand save more, change- use money market versus savings account, take new course of action- using savings to pay off debt. Evaluate alternatives (consider- life situation, economic factors and asses- risk, time value of $) Opportunity cost- what a person gives up by making a choice. Time value of money- increases in an amount of money as a result of interest earned. Saving or investing a dollar today instead of spending it results in a future amount greater than a dollar. Long term goals- 5+ yrs paying down a mortgage.