FHCE 2100 Lecture Notes - Lecture 11: Negative Number, Cash Advance, Equifax

• School: University of Georgia
• Department: Financial Planning, Housing and Consumer Economics
• Course: FHCE 2100
• Professor: Carswell

Document Summary

Backward, where money went (can do for month, quarter, whole year) Record your income from all sources for the chosen period: establish meaningful expense categories, subtract total expense from total income to get cash surplus (positive number) or deficit (negative number, calculate the savings ratio and debt service ratio. Past behavior: income (cash in, earned vs. non-earned income, expenditures (cash out) Budget: fixed = mortgage payment // flexible = grocery (also uncertain) Forward, where money goes, use income/expense statements and balance sheets. Steps: estimate income, estimate expenditures (uncertain ones, see if your budget balances, estimated expenses = estimated income; if not, make adjustments, finalize budget, implement budget and keep records. Principles of effective budgeting: start with fixed, certain expenditures, add fixed, uncertain then flexible, certain last flexible, uncertain, be sure to take into account expected future inflation. Expense breakdown top 2 are housing and food.