MGMT 105 Lecture 7 October 2009 Ch. 16 Risk Alternatives: Avoidance ? not building jewelry store in 3 rd ward Control ? magnetic tags on clothes Retention ? carries risk Transfer ? transfer to another party ? insurance Personal Finances: The Money Wise Aggie: Creating a Budget That Works for You Running own finances equivalent to Managing finances of business ^ keeping a Budget allows for this 78% of NFL players are Bankrupt or in Financial distress 2 yrs after leaving sport. Nick Cage financial issues, liquidation 2 Characteristics of Wealthy People: Live within their means Know where their money is going What can a budget do for me? Puts you in charge of finances inspires confidence, less guilt How can I track monthly expenses? What are my unnecessary expenses? Should I include savings in my budget? Creating a budget that works for YOU! Online Resources Required for a Budget to work: Understandable, Easy, Quick, Can ' t eliminate all fun, needs some flex, discipline Establish Financial goals ? short term, medium term, long term new ipod, aggie ring, car Determine sources of income Estimate monthly expenses Track all expenses for a month Analyze your expenses Revise. Establish an Emergency Fund Save 10-15% of your monthly income Always Pay yourself first Income isn ' t just from jobs: Financial Aid Work Family (Parents) College Fund Fixed Expenses: Rent Car Payment Emergency Fund Savings Variable Expenses: Entertainment Eating Out Clothes Gifts ?Problem is not how much we earn ? its how much we spend? ?Latte Factor? - All unnecessary expenditures that you buy each month Coffee, Tanning/Gym memberships, eating out, movies, CDs, vending machine **Budgeting Worksheet** Software: Quicken, MoneyPlus, Excel Online Stuff: Geezeo, Mint, Wesabe Budgeting Tips: Pay yourself first Dinners with friends Don ' t make impulse purchases Buy Generic Brands Careful with paying for excessive services ? Tanning, gym memberships, etc biggest barrier to becoming rich is living like you ' re rich before you are.
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