Managerial Accounting

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PART

Tools for Financial Planning

Chapter 2

Planning with Personal

Financial Statements

Chapter 3

Applying Time

Value Concepts

Chapter 4

Using Tax Concepts

for Planning

■ How to increase net cash

flows in the near future

■ How to increase net cash

flows in the distant future

■ How much to save for a

specific date in the future

■ How much to save each year

Your

Financial Plan

for Budgeting,

Saving,

and Taxes

Your

Wealth

■ What tax savings are

currently available

■ How to increase tax savings

in the future

THE CHAPTERS IN THIS PART INTRODUCE THE KEY TOOLS

used to make financial planning decisions. Chapter 2 describes the personal

financial statements that help you to monitor your spending and guide your

budgeting decisions. Chapter 3 illustrates how you can use time value of

money concepts to make decisions about saving. Chapter 4 explains how to

use tax concepts to assess and minimize your tax liability. Your budget, saving,

and tax plans all influence your cash flows and wealth.

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Page 28

CHAPTER

2

Planning with Personal

Financial Statements

W

here does it all go? It seems like the last paycheck is

gone before the next one comes in. Money seems to

burn a hole in your pocket, yet you don’t believe that

you are living extravagantly. Last month you made a pledge to

yourself to spend less than the month before. Somehow, though,

you are in the same position as you were last month. Your money

is gone. Is there any way to plug the hole in your pocket?

What are your expenses? For many people, the first obstacle is

to correctly assess their true expenses. Each expense seems

harmless and worthwhile. But combined they can be like a pack

of piranhas that quickly gobble up your modest income. What

can you do to gain control of your personal finances?

Just read on in this chapter and you will see how to...