Syllabus Topic
Core 1: The Nature of Commerce
Financial management
investigate tools and strategies for effective financial management, including:
- monitoring and record-keeping to avoid overcommitment, eg managing mobile phone costs
- budgets, eg using digital technologies to develop a financial plan
- savings and superannuation plans
Financial management is the process of planning, controlling, and monitoring an organisation's financial resources to achieve its objectives. Effective financial management is crucial for individuals and organisations to ensure they can meet their financial obligations, avoid overcommitment, and achieve their financial goals. Here, we'll explore tools and strategies for effective financial management, focusing on monitoring and record-keeping, budgeting, and savings and superannuation plans.
Monitoring and Record-Keeping
Monitoring and record-keeping are essential aspects of effective financial management. These tools help individuals and organisations track their income, expenses, and financial transactions to avoid overcommitment and make informed financial decisions. Modern digital technologies, such as financial management apps like YNAB (You Need a Budget), and Pocket Guard, can streamline this process, offering real-time updates and personalised insights into spending habits.
Budgets
Budgeting is a fundamental tool for financial management, helping individuals and organisations plan their finances and allocate resources effectively. Digital technologies, such as budgeting apps like Goodbudget and EveryDollar, can simplify the budgeting process by automating calculations and providing visual representations of financial goals and progress. These tools can also help identify areas where expenses can be reduced or optimised.
Savings and Superannuation Plans
Saving for the future is another critical aspect of financial management. Superannuation plans, or retirement savings accounts, are designed to provide income in retirement and are mandatory for many employees. Effective management of these plans involves understanding contribution limits, investment options, and tax implications. Platforms like Vanguard, Fidelity, and Australian Super offer tools and resources to help individuals manage their superannuation and retirement savings effectively. Employees at Microsoft have access to a range of superannuation and retirement savings plans, managed through platforms like Fidelity, to help them save for their future financial security.
Effective financial management is essential for individuals and organisations to achieve their financial goals and avoid overcommitment. By using modern tools and strategies, such as monitoring and record-keeping, budgeting, and managing savings and superannuation plans, individuals can make informed financial decisions and secure their financial future.
Sources
YNAB: YNAB (You Need a Budget)
Forbes: Pocket Guard
Goodbudget: Goodbudget
Ramsey Store: EveryDollar
Investopedia: Superannuation
Vanguard: Vanguard
Fidelity: Fidelity
Australian Super: Australian Super
Microsoft: Microsoft
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