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Section 2.1
Your Personal Financial Landscape
Objectives
After studying this section, you will be able to:
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planning and creation of a budget.
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Terms
budget
income
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cash flow statement
net worth statement
net worth
asset
liability
wealth
Budgets
In Chapter 1, you learned about the importance of financial planning.
Planning allows you to meet changing needs and goals over your lifetime. It
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of your money and avoid financial problems.
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Planning helps you meet daily needs and achieve your future goals as well.
Start by following the steps in Figure 2-1 to create a budget tailored to
your income and needs. These steps can help you create a simple, workable
budget.
Creating a Budget
Step 1 Establish financial goals.
Step 2 Estimate and total your income.
Step 3 Estimate and total your expenses.
Step 4 Analyze current income and spending.
Step 5 Prepare a budget.
Step 6 Evaluate your budget.
Goodheart-Willcox Publisher
Figure 2-1 Following these steps will help you establish a budget tailored to
your needs.