Managing cash
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Managing cash is important for planning major purchases like a home or car. The document discusses the importance of planning for different types of expenses including fixed, variable, occasional, planned, and unplanned costs. For example, a 20% down payment on a $300,000 home would be $60,000. Saving adequately for large purchases requires budgeting for regular, changing, and unexpected expenses over time.
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Managing cash
- 1. Managing Cash Created by Ms. Snyder
- 2. Opening Questions What important events your family and friend celebrate together? What is it that families plan these events? How planning is important to the success of these events?
- 3. Planning is important in money matters too. How much is a down payment for a $300,000 house? (20% down payment is required by the bank) How do people pull together enough money to make a down payment for a car or a home? How do people make sure they have enough money to cover expense for entire month?
- 4. Types of Expenses Fixed Expense: Spending that remains the same form month to month. (Rent or Car Payment) Variable Expense: Spending that changes form month to month (Cell phone bill, gas for the car, food purchased at restaurant) Occasional or Periodic Expense: Expenses that occur once or a few times a year (Property taxes, car maintenance)
- 5. Type of Expenses Planned Expenses: Spending you expect, and for which you plan (New clothing, Friday Night Movie) Unplanned Expenses: Spending for an emergency, an urgent need, or an impulse purchase. (Car repairs from an unexpected accident, visit to a doctor for a sprained ankle, donation to a collection for victims of an earthquake)