MM - Money Management [OVERVIEW]

Money Management

Introduction

A common definition of management is to be in charge. Therefore, money management simply means being in charge of your money. Good money management begins with a plan, also known as a budget. The budget evaluates the amount of money coming in as well as the amount of money going out. Financial planning strategies should be interwoven into the budget to ensure financial goals are met. Financial institutions also play a part in money management. The types of financial institutions you utilize depend upon your financial needs and goals. Part of your financial needs might be the types of financial transactions and services that you will need to meet your goals. Therefore, it is important to understand the various types of banking transactions and services available. Online banking is now commonplace and has affected both business and personal money management. The focus on money management would not be complete without credit scores and credit reports. The credit score and the credit report reflect your ability to manage money. Hopefully, all your hard work with money management will pay off and be reflected in your credit score!

Knowledge Questions

In this module, we will be unraveling these knowledge-based questions:

    1. How are budgets created?

    2. What are the types of financial institutions and what are their functions and purposes?

    3. What services do banks offer?

    4. How can financial planning strategies be used to achieve business financial objectives?

    5. How has online banking changed banking for the bank and for the consumer?

    6. What is contained in a credit report and how does it affect business and personal life?

Key Terms

50/30/20 rule | a budgeting strategy that focuses on using 50% of income for needs, 30% of income for wants, and saving 20% of income

Budget | a plan to help you manage your money

Credit report | a report that contains a listing of your financial history

Credit score | number that is used by lenders to determine how well you manage your money and how likely you are to pay back a loan

Depository |  financial institutions in which you can deposit money for safekeeping

FDIC | Federal Deposit Insurance Corporation (FDIC) is an agency created by the U.S. government to protect people’s money

Fixed expenses | expenses that stay the same for each payment period

Mobile banking | using a bank’s mobile app on a smartphone or device

Non-depository | financial institutions that don’t hold money for you, but provide other financial services

Online banking | accessing banking information online

SEC | Securities and Exchange Commission (SEC) is like a watchdog for the stock market

Variable expenses | expenses that change depending upon the amount that is used

Money Management Pre-Test | Activity

Hi students, let's try something different! Below is a pre-test for this module. Give it a try!

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