LESSON 1: Financial Planning b. Provide for family’s needs and vi.

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children’s education 1. E.g. investments, loans, start
Personal Financial Planning 3. Proud Parents own businesses
a. Task of determining how a business will afford a. More children vii. Establish credits
to achieve its strategic goals and objectives, b. Provide for family’s needs and 1. It is important to build your
b. The development and implementation of totally children’s education credit score
coordinated plans for achieving one’s overall c. Longest stage viii. Develop a personal financial identity
financial objectives 4. Pre-retired ix. child-bearing/ raising
c. Managing money to achieve personal a. Children are about to graduate x. Education for children
economic satisfaction b. Prepare for retirement xi. Develop protection
d. A document containing: 5. Retired 1. Through insurance and
i. Person's current money situation a. Need to cover daily expenses, health investments
ii. Long-term monetary goals needs, leisure activities xii. Increase income due to expanding
1. Can be short-term or b. Concern becomes the risk of running needs
intermediate out of money 1. Most especially if you are the
iii. Strategies to achieve those goals Stage 1: Basic Wealth Protection breadwinner or starting up your
a. individuals should be focusing on building own family
Current Financial State = present value financial security
Future Expectation = future value b. 16 - 45 years old This is where you build yourself and know your place
c. Young single professionals and building a in the financial world
The Life Cycle of Financial Planning family
- Series of stages in which an individual passes d. Activities: Don’t forget to save and this must be the stage to
during his or her lifetime i. Spend money on gadgets, travel, grow your skills
social activities
Life Stages ii. Don’t usually Save Stage 2: Wealth Accumulation
1. Young Single Professionals iii. Develop a plan for eventual a. Household head has reached peak earning
a. Spend money on gadgets, travel, independence years and is accumulating wealth and
social activities iv. Preparing for career approaching retirement
b. Don’t usually save v. Evaluate future financial needs and b. 38 - 65 years old
2. Building a Family resources c. Pre-retired individuals and proud parents
a. Married and have kids 1. Resources = time and people d. Also called as Pre-retirement
around us e. Activities:
 i. Assist with higher education for vii. Individuals finally reached the time to v. Review your goals often
children reap in dull what they have sown 1. The more you review your
ii. Invest 1. But if you are really wise in goals, the higher the probability
1. At this point, an individual’s managing your finance, you of achieving them
income is already established won’t wait to grow old in order 2. When you review your goals
iii. Update retirement plans to show your efforts you are refocusing them
iv. Develop estate plans (Will) e. Survey results: out of 100 Filipinos who are at 2. Financial plans provide a guide for action
v. Part-time income or volunteer work age 65: and decision-making
1. Ages 55 - 64 years old i. 45 are dependent on relatives a. Financial plans can direct actions
2. Individuals become tired of their ii. 30 are dependent on charity toward desired outcomes
usual jobs iii. 23 are still working b. Assist in identifying clear actions to
vi. Meeting responsibilities of aging iv. Only 2 are financially independent take in order to put yourself in the best
parents financial position
The Benefits of Personal Financial Planning c. When action are coordinated and
Stage 3: Wealth Distribution 1. Financial planning helps you set and reach focused on a specific outcome they
a. This stage involves the consumption of wealth, your goals become more effective
usually during retirement a. People that have clear goals are 10 3. Financial planning has emotional and
b. 65 years old and up times more likely to succeed mental health benefits
c. Retired Individuals i. Japanese Ikigai Concept and a. Individuals with a plan are less
d. Activities: “Para kanino ka bumabangon?” stressed and tend to be more optimistic
i. Re-evaluating and adjusting living b. Setting and achieving solid financial about their future compared to those
conditions and spending related to goals that do not have any sort of financial
health and income i. Personalized (DIY) plan
ii. Increasing risk ii. SMART goals (specific, b. Financial decision are often big
1. Not just health risks but also measurable, achievable, decisions that can have lasting
financial health risks since realistic, and timely) consequences, which can positively or
savings will be used up already iii. Visualize your goals negatively affect you in the long run
iii. Re-evaluate or assess your insurances 1. Law of attraction 4. A sense of freedom from financial worries
and retirement plan iv. Align goals with values obtained by looking to the future,
iv. Finalize estate plan 1. Always look for a anticipating expenses, and achieving
v. Finalize will purpose; what motivates personal economic goals
vi. Dream vacation you?
 a. Individuals who are well managed will c. Goals can be: short-term (1-2 years), iii. Career Choice
lead to a financial plan that can intermediate (2-10 years), and iv. Health
enhance the quality of life long-term (more than 10 years) v. Economic Environment
d. 1. Is the economy in
Personal Financial Planning Process by Siegel TIMING GOALS INCOME SOURCE
recession?
and Yacht 2. Is there an ongoing
Where you’d like to be, where you are, and how to go Short-Term Reduce Debt Wages/Salary pandemic?
from here to there (1-2 years) vi. Cost vs Benefit
a. Defining goals Intermediate Accumulate Wages/Salary 1. Select and create
i. Make use of SMART GOAL (2-10 years) Assets decisions
b. Assessing the current situation 2. Decision must reap
Long-Term Create Investment Returns
c. Identifying choices great rewards
(more than 10 retirement
d. Evaluating choices years) income vii. Diversify your choices
i. Evaluate the choice that will benefit
you the most Financial Problems and Difficulties: Steps to
2. Assessing the current situation
e. Choosing Overcome Them
a. Figuring out where you are or
f. Assessing the resulting situation 1. Identify the underlying problem that’s
assessing the current situation
i. Assess if your choice positively causing the difficulties
i. Assets, debts, income/s, and
benefited you or not Sources of Reason Solution
expenses
g. Redefining goals Financial
3. Evaluating Alternatives and Making
i. (if necessary) problem
Choices
h. Identifying new choices
a. Figuring out how to go from here to Unemployment or Using credit for Re-evaluate your
i. Choosing lower than usual living expenses or lifestyle, create and
there
j. Assessing the resulting situation over and over income reduced income follow your budget
b. You must be realistic and yet
again
imaginative about your current situation Unexpected Increased medical Simplify your lifestyle
to see the choices it presents and the illness or accident expenses and low/ Get all the help you
**Personal Financial Planning Process starts from no income can (e.g. HMO)
future and current choices may create
somewhere but it does not end
c. Factors to consider in making choices: Moving out on your Used to high Adjust expectations and
i. Family structure own standard of living learn to live on what
1. Defining Goals you earn
1. Breadwinner or not?
a. Make use of SMART GOAL
ii. Age Use cash, not credit
b. Figure out where you want to go
Retirement You're now asset rich Sell the house and a. Turn priorities (what’s important to you) c. All monetary aspects and how to circulate
and cash poor move into an affordable into actionable and achievable goals in money; thus, how it is processed.
one what you do with your money d. Money management depends on your lifestyle,
Invest extra proceeds 4. Small steps are key! family structure, and overseeing the capital
from the sale and enjoy a. E.g. needs over wants; self control usage from an individual perspective
life more
5. Develop your plan to overcome financial e. Deals with budgeting, spending, saving, and
Emotional You are not willing Set emotions aside problems for good- put together a realistic investing
attachment to part with it even and look at it in a plan to accomplish your goals
if you can’t afford it financial perspective a. E.g. each month I will spend less and What are the 3 Major Money Management
(e.g. home, car,
business, toy) Picture life 5 yrs from the put the difference toward my debt Activities?
now and its so my balance declines by at least 1. Organizing Personal Financial Documents
corresponding P1000 until it reaches 0 a. Benefits of an organized system of
expenses
6. Review how things are going- if you keep financial records and documents
Addiction Spending more Get professional help doing what you were doing before, then you’ll i. Handing daily activities
than you earn continue to get the same result as before - ii. Planning and measuring
trying to satisfy If you don't, You’ll problems. financial progress
your addiction never overcome your
financial problems
a. Is your plan working? If not, look back. iii. Making effective investment
Be Realistic! decisions
iv. Determining resources for
2. Create a budget- spend money on a way that current and future spending
LESSON 2: Money Management
helps solve the problem b. To help payment of bills on time, track
a. Budget- monthly spending plan for goals, breakdown of funds, allocation
Money Management- it refers to the strategies and
your money of money. etc
techniques to determine the use of an individual,
b. 50/30/20 budgeting rule 2. Creating Personal Financial Statement
company, or institution’s capital.
i. 50 - needs 3. Creating and Implementing a Budget
a. Day-to-day financial activities necessary to
ii. 30- wants
manage current personal economic resources
iii. 20- savings Filling System (inc in quiz)
while working towards long-term financial
3. Determine Financial Priorities to guide your 1. Auto- car or truck and maintenance record
security
spending choices- setting clear priorities for a. Car receipts and parking receipts
b. The process of expense tracking, investing,
yourself makes it easier to make tough 2. Advisors- list of names, addresses, phone
budgeting, banking, and evaluating taxes of
financial decisions numbers, and email addresses of important
one’s money which is also called investment
management people in your financial life
 a. Financial advisors, loans, and St. Peter a. Planning tools that provide an up-to-date iii. Real Property: immovable property
3. Bank Accounts- keep your monthly statement evaluation of your financial well-being (e.g. land)
until it is reconciled and the next monthly b. Helps you identify potential financial problems iv. Personal Property: movable property
statement has come in c. Helps you make better informed financial (e.g. furniture, automobile, items that
a. Payroll decisions depreciates)
4. Bills Due / Utilities- immediately after d. They measure your financial condition so you v. Fair Market Value: actual value of an
opening mails, the bills you have to pay are can establish realistic financial goals and asset which can reasonably be
here evaluate your progress toward those goals expected to sell in the open market
5. Credit Cards- current monthly statements, 1. Assets are posted using fair
and older statements that contain expensive Balance Sheet market value in Balance Sheet
items that are under warranty through your a. Your financial position: how much you are
credit card company worth today f. Liabilities: What you owe
6. Education- enrollment records, diplomas, b. The assets you hold, less the debts you owe, i. Represents an individual’s or family’s
certificates, report cards,and transcripts equal your net worth at a given point in time debt
7. Employment- employee handbook and c. Helps you track the progress you’re making in ii. Something that you owe and must
benefits handbook, employee evaluation, building up your assets and reducing your debt repay in the future
paycheck d. Balance Sheet Equation: 1. Current / short-term: owed and
8. Contracts- legal agreements i. Total Assets = Total Liabilities + Net due within 1 year of the date of
a. Real estate titles, insurance policy, etc Worth balance sheet
9. Loans- all documents pertaining to a loan for ii. Net Worth = Total Assets - Total a. E.g. utility, rent,
as long as you owe money on the loan Liabilities insurance premiums,
10. Investments- mutual funds statements, e. Assets: what you own credit cards, other short
bonds, stocks, COs i. Liquid Assets- low-risk financial assets term loans
11. Tax Records- keep tax returns and supporting held in the form of cash/ instruments b. Long-term: debt due 1
documents for at least 3 years that can readily be converted to cash year or more from the
a. BIR forms, Cedula / CTC, etc with little or no loss in value date of the balance
12. Wills, Trust, and Estate Planning- all 1. Easily turn into cash within 1 sheet
executed estate-planning documents, as well year / without losing the value i. E.g. education
a list of beneficiary designations (e.g. cash on hand, savings, loans, real estate
checking, payroll, stocks, etc) mortgages, auto
Benefits of Personal Financial Statement ii. Investments: intangible financial assets loans, secondary
home mortgage
 c. Outstanding Balance: ii. Personal spending similar to budget
Income Expenses Cash surplus /
how liabilities should be Deficit helps outline where income is earned
posted and where expenses are incurred
g. Net worth: the difference between your assets wages/ salary Living Subtracting b. A plan you create to help meet expenses and
and liabilities expenses total spend money the way you want to spend it
i. Measure of financial worth c. Solves common financial problems of
Self-employme Asset Expenses from
ii. Amount of actual wealth or equity that nt income purchases total income overusing credit, lacking a regular savings
an individual or family has in owned program, and failing to ensure financial
assets Bonuses / Other Gives cash security can be minimized through budgeting
iii. Money left after selling all owned commissions payments surplus (/ i. Helps solve financial problem but does
assets at their estimated fair market deficit) not solve financial problem totally but
value and paying off all liabilities Interest and Fixed For the period just helps you to not overuse your
dividends expenses credit
Balance Sheet Format and Preparation pension d. Cash Basis
1. List all assets at their fair market value as of i. Keep track of the inflows and outflows
the date you are preparing the balance sheet scholarship / Variable
grants expense
2. List all current and long-term liabilities Benefits of Budgeting
3. Calculate net worth a. Gives control over money
Preparing the Income and Expense Statement b. Helps focus on financial goals
Income and Expense Statement 1. Record your income from all sources for the c. Keeps you on top what you’re spending
a. Financial performance over time chosen period d. Make it easier to stay aware of your savings
b. Tracks income earned, as well as expenses 2. Establish meaningful expense categories and debts
made, during a given period 3. Subtract total expense from total income to get e. Helps figure out what you can borrow
c. Actual expenses vs amount budgeted the cash surplus ( + number) or deficit ( - f. Helps save for unexpected costs
d. Helps control future expenses and purchases number) g. Makes talking about money with your family
to have funds needed to carry out financial easier
plans Spending Plan (Budget) h. Shows where money issues likely come from
e. Cash basis: coin and currency, checks, debit a. Informal document used to determine cash
cards (posting of Income and expense flow of an individual or household The Budgeting Process
statement) i. Informal = use of excel or notebook 1. Estimating Income- all income expected for
f. What we earn and where it goes the year
 a. Take home pay, expected bonuses /
commissions, Pension or annuity
income, and investment
income–interest, dividend, rental, and
asset (particularly security) sale
income
b. Always take note of disposable income
or any amount you received for which
payment is required (loan)
2. Estimating Expenses- preparing a schedule
of estimated expenses for the coming year
a. It is easier to budget expenses if it is
grouped into several general
categories rather than trying to
estimate each item
b. Choose categories that reflect your
priorities
3. Finalizing the Cash Budget
a. Comparing projected income to
projected expenses
b. Show balanced budget
c. If income exceeds expenses, it is still
called a balanced budget
The 50/30/20 Budgeting Rule
a. 50% - needs
b. 30% - wants
c. 20% - savings
**Sir does not recommend 50/30/20 because it has
many disadvantages:
a. The rule is constant; there will be no
adjustments
b. It does not focus on your goal; hence, it
focuses on wants
c. It does not include giving
Money Saving Formula from Rich Dad Poor Dad
by Robert Kiyosaki:
Income - SAVINGS = Expenses
NOT
Income - Expenses = SAVINGS
** 20%- savings
30%- set aside for expenses (needs)
Whatever is left will be allocated for wants
Contrary to 50/30/20 rule this formula focuses on
savings rather than wants
Emergency Funds according to Chinkee Tan: 6x of
income
How to know if the budget technique is effective?
1. I am starting to pay my bills on time
2. My finances are improving as months go by
3. No more accumulation of loans
4. I am not stressed about money
5. I don’t buy impulsively anymore
Video Takeaways:
3 basic steps to make the most of money:
1. Create a budget
2. Set saving goals
3. Tackle debts
LESSON 3: Consumer Credit
Credere = believe
● means to allow delayed payment
● Credit is used to purchase goods and
services, to finance living expenses, or to
make payments more convenient by delaying
them for a relatively short time.
● Nonbusiness debt used by consumers for
expenditures other than home mortgages
(Barman & Forgue; Personal Finance)
➢ Consumer credit is personal debt taken
on to purchase goods and services. A
credit card is one form of consumer
credit.
➢ Usually used to describe unsecured
debt that is taken on to buy everyday
goods and services.
➢ Extended by banks, retailers, and
others to enable consumers to
purchase goods immediately and pay
off the cost over time with interest.
 Family and close friends that you Merchants worldwide accept credit cards as a method Less future buyers
borrow money from also are of payment because the issuer (the bank or finance Less future Income
examples. company) has assumed the default risk by ● OVERSPENDING
guaranteeing the merchants' payment. Impulsive Buying
Installment Credit
● IDENTITY THEFT
CREDIT LIMIT: set by the lender and is the maximum Prone to identity theft online - you can go
● Typically issued by one vendor for a specific to the bank or contact them if you lost your
outstanding debt allowed on the credit account.
purchase card and it can easily be replaced
Difference between Installment and
● Payments are made until that amount is paid revolving credit. Installment has no limit
for. while revolving is umiikot lang SOURCES of Consumer Credit
● Popular for the purchase of consumer ADVANTAGES ● CREDIT CARD COMPANIES
durables ● PURCHASING POWER Cash advance
● Risk of nonpayment Enjoy earlier You have a 100 thousand credit limit that
● Interest Education Power you just used is 60 thousand the remaining
Buying cell phone through buy now pay ● SECURITY balance you can withdraw but has a high
later; home credit More okay than cash interest.
Iwas Fraud Ex. CITI BANK, master card, US Bank
Revolving Credit Kapag nawala ang credit card, just call the ● RETAIL STORES
● Extends the ability to delay payment for bank para ipa-cancel ang card Ex. sari-sari store
different items from different vendors up to a ● ESTABLISHING GOOD CREDIT ● BANKS & CREDIT UNIONS
certain limit Loans, Rewards, Scores, and High Interest
● Merchants worldwide accept credit cards as a Discount kapag always nakakabayad ● FINANCE COMPANIES
method of payment because the issuer (the ● EMERGENCIES Ex. Juan the Hand, Gcash
bank or finance company) has assumed the No cash, go for Credit card ● PAWNBROKERS
default risk by guaranteeing the merchants' ● BENEFITS Ex. Palawan, Cebuana, etc.
payment. Reward points ● PRIVATE LENDERS
● Convenience and security. ● LEVERAGE Ex. friends, families, 5’6 (Bombay)
Gastos now pay through bank muna then
pay usually after 1 month. DISADVANTAGES CREDIT CARD
● FEES & FINANCE CHARGES - open-ended account at a financial institution
Trivia: First modern credit card was BankAmericard Late fees, annual fees that allows the holder to make purchases almost
(1958) Big charges if di mabayaran sa due anywhere. (anytime)
● REDUCTION OF FUTURE BUYING POWER
A CREDIT CARD - You can call your card issuer and ask if they It is the key factor in determining a borrower’s
- is a thin rectangular piece of plastic or metal can move the due date willingness to live up to the terms or agreement of
issued by a bank or financial services company, that - Match due date with your payday the loan.
allows cardholders to borrow funds with which to pay
for goods and services with merchants that accept ● You Let Someone Use Your Card, and They're CAPITAL: Do You Have Sufficient Assets?
cards for payment. Not Paying the Balance - less likely to default on
payments
Common Credit card Problems and Solutions Your credit card is in your name, and you run a risk What you have left when you pay liabilities
● You Can't Afford Your Payments each time you let someone use it.
shopping spree CAPACITY: Can You Repay Your Debts?
- don't stop making your payments You will be stuck with the balance, not your friend or - ability to repay a loan with
- cut back on your monthly expenses family member present income
- live within your budget
Ikaw ang magsa suffer kapag ginamit ng family or CONDITIONS: What Else Is Going On?
● Credit Card Declined friends and card mo at hindi nabayaran ang - overall economic climate and external
Exhausted credit line balance environment.
Is your job secure?
Late payments
● You Have Late or Missing Payments
Fraudulent Transactions
COLLATERAL: Is the Debt Secured?
- get in touch with your card issuer
This will cause your credit score to fall - property pledged to assure
Either overlimit, late payment or ipa-cancel
repayment of a loan.
● You Have a High Annual Fee - set up email and text alerts
too high of an annual fee - set up electronic payments
- ask them if they'll waive the annual fee - as long as you have money in LESSON 4: LIQUIDITY MANAGEMENT
- canceling your card your account to cover the bill,
- card with no annual fee. you won't have to worry about Financial liquidity
Ex.CITIBank it. ● refers to the degree of ease with which any
Set email & text alerts
asset or investment can be readily converted
Common Credit Card Problems and Solutions into cash, either to spend or to invest.
● Your Pay Day and Credit Card Due Date Are Creditworthiness (5C's)
● It also determines how easily you can sell an
at Odds CHARACTER: Are You Responsible?
asset and at What price, should the need to do
- trustworthiness & reputation
 so arise. All asset classes have varying
degrees of liquidity.
MOSTLY LIQUID ASSETS Easy and readily to sell and
mortgage without losing the value
Cash
Certain types of investment
Checking or saving account - IN BANK
HARD hard to turn into cash
Real estate - HOUSE & LOT
Valuable items - JEWELRIES, FURNITURE
Automobiles - CARS
EMERGENCY FUND
● tells you how much cash you'd have quick
access to if you were in a tough spot.
● You'll need quick access to funds so you can
pay for your essentials and stay on top of your
bills.
● It doesn't matter what your net worth is or how
wealthy you are on paper, In a dire financial
situation.
What matters is whether or not you have funds that
you can get immediate access to!
Current assets would include cash, cash
equivalents, accounts receivables, stock inventory,
marketable securities, prepaid liabilities, and other
liquid assets. Current assets may also be called
current accounts.
Marketable securities are CD’s, stocks, bonds, and
funds, etc.
Current Liabilities: Utilities, Rent, Insurance
premiums, credit card balances, others that are
payable within 1 year
LIQUID RATIOS
- measure the ability of an individual to meet its
short-term debt obligations. These ratios
measure the ability of a person to pay off its
short-term liabilities when they fall due.
● CURRENT RATIO
- measures a person's ability to pay
short-term obligations or those due
within one year.
FORMULA:
Current Assets/Current Liabilities
● WORKING CAPITAL
- the difference between your liquid
assets, such as cash or accounts
receivable, and the money you owe in
the short term.
FORMULA:
Current Assets - Current Liabilities
● CASH RATIO
- the ratio of a person's total cash and
cash equivalents to its current
liabilities.
FORMULA:
Cash in Bank + Cash on Hand/Current Liabilities
● ACID-TEST / QUICK RATIO
- an indicator of a company's short term
liquidity position and measures a
person's ability to meet its short-term
obligations with its most liquid assets.
FORMULA:
Cash + AR + Marketable Securities/ Current Liabilities
> 1 - more than enough current assets to cover
current liabilities
= 1 - enough current assets to cover current liabilities
< 1 - not enough current assets to cover current
liabilities
Lesson 5: Cost of owning and Operating
an Automobile
● Buy the car that you love! You can make
payments later
Eg. Bibili tapos ibebenta lang ulit
● Think Rationally and Logically before you buy
a car
Before Buying a Car
❖ Choosing a car - Research!, Port Utility,
Prices, Features, Brands, Model. Assess drive
and Read Car Reviews!!
Mas okay tumingin online if ayaw mo
naman ng brand new and mas okay ang
malaki ang down payment kaysa sa 0%
kasi babaawian ka sa amortization in the
end.
❖ Affordability - Amount of down payment, Size
of the monthly loan payment you can afford,
Review your budget! Analyze your expenses.
(compare everyday transpo from your
amortization)
❖ Bring your trusted mechanic when buying a
car - He will give you valuable advice
Also you can bring your friend that is an
enthusiast in the cars.
❖ Think of its resale value - Car value
depreciates. Car continually evolve for better
(classic/vintage car, okay)
Cost of Owning a Car
● Initial purchase price - magkano ang
babayaran mo
● Financing costs and interest over the life of the
loan
● Registration and title costs - COR dapat
always dala
● Emission inspection - Certificate
● Insurance - Most important (e.g. incase of
accidents such as mabangga, towing)
Paying insurance the amount is around
16-20k but still it depends on accessories,
issues, kind of cars, etc.
● Scheduled maintenance
● Storage or garage spaces - Do not buy a car if
you do not have a parking lot
Cost of Operating a Car
● Gasoline, oil and fluid
● Unexpected repairs and maintenance
● Tickets
● Parking and tolls
Lesson 6: Housing - the Cost of Shelter
The Down Payment
- Most buyers finance a major part of the
purchase price of the home, but they’re
required by lenders to invest money of their
own, called equity.
Mortgage Payments/Loan
Fixed-rate mortgage
- The traditional type of mortgage in which both
the rate of interest and the monthly mortgage
payment are fixed over the full term of the
loan. (e.g. PAG-IBIG)
Adjustable-Rate Mortgages (ARMs) (Floating)
- A mortgage on which the rate of interest, and
therefore the size of the monthly payment, is
adjusted based on market interest rate
payments.
Kapag tumaas ang interest, ayon ang
iyong babayaran.
Property Taxes and Insurance
- Taxes levied by local governments on the
assessed value of the real estate for the
purpose of funding schools, law enforcement
and other local services.
Annually binabayaran, it depends on the
value and size of the house.
- Insurance that is required by mortgage lenders
and covers the replacement value of a home
and its contents. (e.g. MRI - If the owner of the
house died, the house is automatically paid)
Maintenance and Operating Expenses
- Maintenance costs should be anticipated even
on new homes. Painting, mechanical and
plumbing repairs, and lawn maintenance, for
example, are inescapable facts of
homeownership. Such costs are likely to be
greater for larger, older
Benefits of Owning a Home
Market Value
 - The market value of a home is the highest
price that the property will bring on the market.
It generally means what a ready and willing
buyer and seller would agree upon as the
price.
Appraised Value
- Real estate appraisers can prepare an
appraised value by examining the structure,
size, features, and quality as compared to
similar homes in the same geographic area.
Quality of Life
- Homeowners generally have more privacy and
larger living and storage space than renters
have.
- Homeowners also have more personal
freedom. In your own home, you are able to
redecorate or remodel to accommodate your
own needs and personal style.
- Owning a home also provides a feeling of
security, stability, and independence.
Should you RENT?
● Renting is the process of using another
person’s property for a fee.
● Landlord is the owner, or owner’s
representative, of rental property
● A person who rents property is called a tenant
or renter.
Advantages of Renting
● Flexibility. If you have a short-term or ● Small living and storage space. Unless you
month-to-month lease, you have the flexibility are renting a house, you will have a smaller
to move if you need to once your lease is up. living space.
● Lower cost. Renting is usually cheaper than ● Scarcity of parking. Many rental properties
the cost of buying a house. Sharing expenses do not provide garages or off street parking.
with roommates lowers individual costs even
more.
● Fewer responsibilities. Renting usually
relieves you of many of the responsibilities of
home ownership, such as costly repairs and
maintenance.
● Amenities. Many landlords provide a number
of amenities for their tenants.
● Convenience. Rental units are often located
in close proximity to major shopping areas,
public transportation, and area businesses.
● Social Life. Apartments offer the opportunity
to meet others and socialize informally,
especially where recreational facilities are
provided.
Disadvantages of Renting
● Noise. Residents usually share common walls
with neighbors above, below, and/or beside
them. Consequently, music, conversations,
and other activities of neighbors can be
overheard.
● Lack of privacy. Because conversations and
other activities can be overheard through
common walls, tenants often feel a lack of
privacy.