Personal finance.

02/21/2023

Over view
Understanding the importance of having a
personal budget
Categories of income and expenses and how to
manage them
Personal savings(savings account, fixed
deposit accounts etc.)
Personal investments( real estate, shares,
bonds, notes, treasury bills)
Factors considered while investingBenard Alurile

Aspects of money.
Personal finance refers to how individuals
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manage their day to day finances or money and

plan for the future.

The main objective of personal finance is to

achieve financial independence.
Individuals do not need to live on paycheck to
paycheck basis and set their own objectives or
goals.
Therefore individuals need to develop a
spending plan or a budget to achieve this
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objective
Budget. This is a forecasted statement of individuals
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expenses and the incomes you expect to receive over

a given period of time.

Why prepare a personal budget

Helps to plan for expenses or manage them
Save for the future
Helps spend wisely
Plan for emergencies
To live within ones means
Helps to reduce family arguments about money
Make your dream come true
Achieve ur financial goal Benard Alurile
INCOME. 02/21/2023
This is the money received or a portion of earnings received from
committing your efforts into production
(business dictionary.com) defines income as the flow of cash or cash-
equivalents received from work (wage or salary), capital (interest or
profit), or land (rent).
Categories of income
 Bonuses, child support, salaries, social security, tips, wages, interests
or dividends, rents or royalties, retirement income and disability
benefits
How to manage income
 Avoid leakages
 Broaden ur earnings base
 Spend on priorities
 Be creative or innovative
 Get it for free
 Choose the best saving plan Benard Alurile

 Have a good attitude

Personal expense. 02/21/2023

These are the outgoings or spending's for individual purposes

of family related spending.
Categories of expenses
Debt payments i.e. loan, student loan and credit card
Education, tuition, day care, books and supplies
Entertainment and recreation i.e. sports, hobbies, concerts
Food i.e. grocery, dinning out KFC
Rent i.e. housing, mortgage
Insurance
Persona i.e. clothing, hair care, gym dressing
Gifts i.e. birth days
Savings i.e. retirement, education, emergency fund
Transportation Benard Alurile
Utilities i.e. phone charges, water electricity
 How to manage expenses 02/21/2023

Do the math

Live within ur means
Stick to ur budget
Get it for free
Spend on priorities
Reduce on gifts
Keep watch of phantom money
Have spending goals
Share it
Find the best buy
Bargain where necessary
“Too many people spend money they earned to buy things they
don't want to impress people that they don't like”.Benard
--WillAlurile

Rogers
Savings. 02/21/2023

A portion of income not spent on consumption ( income kept

aside to cater for future needs)
How to manage savings
Use a quarter rule
Manage your expenses well
Plan for the income well
Keep watch of phantom money
Make sure it is impossible to access ATM machines
Set you goals
Set up an envelope system
Choose something to save for
Watch your saving grow
“It's not how much money you make, but how much money
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you keep, how hard it works for you, and how many
generations you keep it for.” --Robert Kiyosaki
Debt management 02/21/2023

These are borrowings an individual has either from an

individual or from a financial institution. It is mostly
called a loan.
How debt is managed
Budget
Negotiate
Prioritize payments
Consolidate your obligations
Use a credit counselor
Use it for the purpose
Do not let your expenses surpass ur income
Spend within your means Benard Alurile
Creating wealth or investment management 02/21/2023
Any activity done to generate capital gains
Investment avenues/ avenues of investment
 Financial securities i.e.. Bonds, shares, T.Bs, certificate of deposit
 Non financial securities
 Pension funds or mutual funds
 Real assets i.e. real estate, diamond, gold, art and ornaments
 Agriculture i.e. farming, piggery etc.
 Borrow or lend
 Notes
Considerations for an investment
 Return
 Risk
 Marketability
 Convenience
 Tax shield i.e. initial, continuous and terminal
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What an individual needs to impress when 02/21/2023

you need to keep a proper personal finances

Identify your goals
Budget
Conduct a financial review
Debt management
Building wealth
“You can only become truly accomplished at something you love. Don’t
make money your goal. Instead, pursue the things you love doing, and
then do them so well that people can’t take their eyes off you”. --Maya
Angelou
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CAPITAL BUDGETING DECISION/
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INVESTMENT DECISION
Capital budgeting refers to the decision to invest in
long-term assets. The assets are expected to be used
over a long period of time
• Examples/ categories of capital budgeting decisions
include acquisition of a new plant and equipment,
replacement, expansion of the existing investment
e.g expansion of the firm’s production capacity,
research and dev’t, regulatory or environmental
Investments can also be classified as;
• Mutually exclusive investments
• Independent investments Benard Alurile

• Contingent investments;