FIN 101 Chapter Notes - Chapter 1: Financial Independence, Savings Account, Baby Boom
30 Aug 2016
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Process of organizing and planning your income, expenses, and savings to accomplish a long-term goal. Money management that goes beyond investing and savings accounts. Useful = realistic, able to adapt to change. Honest assessment of where you are mentally and financially. Cost of living should stay around an increase of 3% to counter inflation. Money matters may not mean the same for one partner. Interject discipline in the process and give you a sense of accomplishment as you approach goals. Short term less than a year, ex: increase % on 401k to another % point. Long term beyond three years, ex: saving for a down payment on a house. Midterm one to three years, ex: replacing maturing bank cds with mutual funds. People are outliving the money they set aside. Difficult to set amount bc you don"t know how long you will live. Either increase funding for plan or provide another source of income.
