New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Personal Finance: Chapter 2 Notes

by: Lindsay Fialli

Personal Finance: Chapter 2 Notes FIN 100

Marketplace > Salem State University > Finance > FIN 100 > Personal Finance Chapter 2 Notes
Lindsay Fialli

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These are my notes for Chapter 2 of Personal Finance by Jeff Madura.
Personal Finance
Terrance Doyle
Class Notes
Planning, with, Personal, financial, Statements
25 ?




Popular in Personal Finance

Popular in Finance

This 3 page Class Notes was uploaded by Lindsay Fialli on Tuesday October 4, 2016. The Class Notes belongs to FIN 100 at Salem State University taught by Terrance Doyle in Fall 2016. Since its upload, it has received 5 views. For similar materials see Personal Finance in Finance at Salem State University.


Reviews for Personal Finance: Chapter 2 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/04/16
Chapter 2: Planning with Personal Financial Statements  Assessing your financial position allows you to estimate how much you need to save each period to make specific purchases in the future with cash instead of borrowing money o Some people are afraid to do so and put it of  Personal Cash Flow Statement: a financial statement that measures a person's cash inflows and cash outflows o Allows you to monitor your spending  Deposits in various types of savings accounts can generate cash inflows in the form of interest income  Recording transactions in your checkbook when you write checks helps you identify how you spent your money  Credit or debit cards record your transactions  Net Cash Flows: cash inflows minus cash outflows  Cash inflows tend to increase as you gain job experience and progress within your chosen career  For women, some put their careers on hold for months or years when they have children  When in retirement, you make less than while working and is the same fixed amount  Job type influences income o Jobs that require specialized skills pay higher salaries o The demand for job afects job types available  More income earners in a household = larger income  Factors afecting cash outflows o Size of family o Age  Budget: a cash flow statement that is based on forecasted cash flows for a future time period  Put aside money for unanticipating cash shortages  Identify parts of your budget that you can improve over time  Personal Balance Sheet: a summary of your assets, your liabilities, and your net worth Assets  Liquid Assets: financial assets that can be easily sold without a loss in value o Useful for covering upcoming expenses  Cash, checking accounts, savings accounts  Cash for small purchases  Checking account for larger purchases  Savings accounts ofer interest  Household Assets: items normally owned by a household, such as a home, car, and furniture o Make up larger portion of assets than liquids assets  The market value of an asset is the amount you would receive if you sold the asset today  Investments o Bonds: certificates issued by borrowers to raise funds o Stocks: certificate representing partial ownership of a firm  Consider if you have excess funds  Can make return if firm pays dividends to shareholders  Long-term investment o Mutual Funds: investment companies that sell shares to individuals and invest the proceeds in investment instruments such as bonds or stocks  Managed by portfolio manager and make investment decisions for customers o Real Estate: rental property and land o Rental Property: housing or commercial property that is rented out to others  Generates additional income Liabilities  Current Liabilities: debt that will be paid within a year o Credit card balance o No interest charged if you pay in full  Some people create credit card problems because they are afraid to use any of their cash or other assets  Large accumulation of current liabilities = credit problems  Long-Term Liabilities: debt that will be paid over a period longer than one year o A student loan o Interest expense must be paid periodically  Limit liabilities so you can limit amount of interest owed o Car loan o Mortgage  If you sold enough of your assets to pay of all of your liabilities, your net worth would be the amount of assets you would have remaining  Not being able to repay your debit if all assets were sold could lead to bankruptcy  Economic conditions afects the value of your assets  Demand = Value  You need to monitor your liquidity over time to ensure that you have sufficient funds when they are needed  Liquidity Ratio = Liquid Assets/ Current Liabilities  Monitor your debt level to ensure that it does not become so high that you are unable to cover your debt payments  Debt-to-Asset Ratio = Total Liabilities/ Total Assets  Savings Rate = Savings During the Period/ Disposable Income During Period Strong Demands --> Values of ---> for Homes Homes Increase ---> Strong Values of Assets Economic Increases Conditions --> --> Corporations have --> Values of Stocks high sales Increase


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Amaris Trozzo George Washington University

"I made $350 in just two days after posting my first study guide."

Steve Martinelli UC Los Angeles

"There's no way I would have passed my Organic Chemistry class this semester without the notes and study guides I got from StudySoup."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.