Management and Organizational Studies 2277A/B Chapter Notes - Chapter 5: Canada Deposit Insurance Corporation, Hsbc Bank Canada, Credit Union
Document Summary
Money management: the decisions you make over a short period of time regarding your income and expenses. Separate from decisions on investing funds for a long-term period; it instead focuses on maintaining short term investments to achieve both liquidity and adequate return on investments. Liquidity: access to ready cash, including savings and credit, to cover short-term and unexpected expenses. Main sources for saving and credit are positive net cash flows from personal cash flow statement and credit cards and/or lines of credit from financial institutions. Liquidity is necessary because there will be periods where your income is not adequate to cover your expenses. Savings can be used to cover expenses that are unable to be covered by current income. Credit card financing can be inexpensive if you pay amount owing on your credit card before or on the due date. Interest on line of credit is much lower.