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MONEY MANAGEMENT STRATEGY - Coggle Diagram
MONEY MANAGEMENT STRATEGY
💰 Money Management Basic
Definition: Daily financial activities to manage current resources and build long-term security.
Key Concept: Every spending/saving decision has an opportunity cost.
📂 Components of Money Management
Financial Documents: Store and organize records (e.g., bills, receipts, contracts).
Financial Statements:
Balance Sheet (Net Worth Statement)
Cash Flow Statement (Income vs. Expenses)
Budgeting: Plan for spending and saving.
🗂️ Organizing Financial Record
Home File / Computer / Cloud:
Personal, tax, credit, insurance, investment, estate records
Safe Deposit Box:
Irreplaceable documents (e.g., birth certs, wills, titles)
Digital Tools:
Apps for budgeting, banking, and investment tracking
📊 Personal Financial Statement
Assets: Liquid, real estate, personal, investments
Liabilities: Current (<1 year), long-term (>1 year))
Net Worth = Assets − Liabilities
🧾 Balance Sheet
💸 Cash Flow Statement
Income: Salary, interest, investments, benefit
Expenses:
Fixed (rent, insurance)
Variable (food, entertainment)
Net Cash Flow = Income − Expenses
🧮 Budgeting Process
Assess: Current financial position
Plan:
. Set SMART goals
. Estimate income
. Allocate savings & expenses
Implement: Track spending
Evaluate: Review & revise
Characteristics of Successful
Budgeting
•Well planned.
•Realistic.
•Flexible.
•Clearly communicated
📋 Budgeting Systems
Mental
Envelope (physical)
Written (notebook/spreadsheet)
Digital (apps/software)
🎯 Linking Money Management to Goal
Saving Goals:
Emergency fund
Big purchases (car, house)
Retirement, education
Saving Techniques:
Auto-deposit
Employer match
Regular % of income