Beruflich Dokumente
Kultur Dokumente
Submitted by : Harshita
MRs. Jyoti meena
bhargava
Subject : Home
B.sc. Home
management (family
science III yr
economics)
Unit :2 family
accounting
Benefits of household budget
Types of accounting
1. Short term account
2. long term account
Short-Term Debt
Current liabilities include any obligations that are due
within one year. Categories of short-term debt include
accounts payable, accrued payroll and accrued payroll
taxes. Current liabilities also include any payments in
the upcoming year required to service long-term debt.
For example, payments on a mortgage due in the next
12 months are considered current liabilities.
Long-Term Debt
A long-term debt is any liability owed that is not due for
more than one year. The principal balance of a mortgage
is one common type of long-term debt. Another is the
principal balance, or face value, of bonds sold by the
corporation that will not mature for more than one year.
The unpaid balance of a long-term lease is also a long-
term liability. In some cases, retirement benefits due to
employees are considered long-term liabilities.
Things to be kept in short term accounting:
Monthly bills ( electric , news paper, water, t.v. And
mobile recharges , etc. )
Daily expenses
Medical expenses
Salary
Income tax
Things to be kept in Long term accounting
• Mortgage on building
• Purchasing a vehicle
Service and repair of equipments
Importance of Saving
Emergency cushion - This could be any number of things: a new
roof for the house, out-of-pocket medical expenses, or a job layoff
and sudden loss of income. You'll need money set aside for these
emergencies to avoid going into debt to pay for what you need.
Retirement – If you intend to retire someday, you'll probably need
savings and/or investments to take the place of the income you'll
no longer get from your job.
Average Life Expectancy – With more advances in medicine and
public health, people are now living longer (and needing more
money to get by).
Volatility of Social Security – Social Security was never intended to
be the primary source of income and should be treated as a
supplement to income.
Education - The costs for private and public education are rising
every year, and it's getting tougher to meet these demands.
Interest rates: Higher interest rates will encourage people to save more.
Availability of appropriate savings schemes: With more options to
save money people will be attracted to save more
Advertising of/knowledge about what is available at financial institutions
Confidence/trust in financial institutions
Size of real disposable income: Disposable income is the income left
after paying taxes. Thus more money left in pockets will encourage
people to save more.
Rate of inflation: when inflation is high people have less money left
with them to save because a major part of their disposable income will
be spent to satisfy their needs and wants.
Save for a future purchase: People might save with the motive to
carry out a future purchase e.g. a house
Precautionary factors: People might be ‘saving for a rainy day’
Tastes and preferences of consumers: It also depends on a
individuals preference. Some people save more than others.
Consumer confidence/expectations about future changes in the
economy, e.g. risk of unemployment may lead to people saving
more
From an investors’ perspective the infrastructure asset class provides
appealing investment characteristics which evolve due to their physical
and economic characteristics:
Certificates of Deposit
C. ertificates of deposit are another savings option offered by most banks. CDs are
long-
term savings accounts into which a depositer place a given sum of money for an
agreed-upon time, often five or 10 years.
Annuities
Annuities are low-risk investments that require one-time or ongoing payments,
and pay out a specified sum. Investors who purchase annuities hope to receive
more in payments than they put into the annuity. An annuity may be structured
to provide income during retirement, offering a predictable payment for life.
Mutual Funds
A mutual fund is an investment product that uses stocks to earn money for a large
group of investors. The fund's manager pools money from investors and uses it to
buy many stocks. Some mutual fund managers buy and sell shares of stock daily or
even hourly.
Real Estate
Real estate is another type of investment. While most homeowners hope that their
own homes' values will rise, real estate investors buy land or rental property with
the expectation of selling it in the future.
Commodities
Investing in commodities involves predicting the future price of a product or
resource. Commodities investors buy futures contracts, which represent the right to
buy a commodity, such as crude oil, corn or wheat, for a set price at a given time in
the future.
Bonds-
An Obligation issued by the corporation that promises the holder to
receive fixed annual interest payments and payment of the principal upon
maturity
Financial Institutions-
Retained Earnings- the practice of using corporate
profits for capital investment rather than dividend
payments
Financial Intermediaries, Banks-
A bank is a financial intermediary that
accepts deposits and channels those
deposits
into lending activities, either directly by loaning
or indirectly through capital markets. A bank
links together customers that have capital
deficits and customers with capital surpluses.
Financial Intermediaries
Insurance is the equitable transfer of the risk of a loss, from one entity to another
in exchange for payment. It is a form of risk management primarily used
to hedge against the risk of a contingent, uncertain loss.
An insurer, or insurance carrier, is a company selling the insurance; the insured,
or policyholder, is the person or entity buying the insurance policy. The amount
of money to be charged for a certain amount of insurance coverage is called the
premium. Risk management, the practice of appraising and controlling risk,
has evolved as a discrete field of study and practice.
The transaction involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the insurer's
promise to compensate (indemnify) the insured in the case of a financial
(personal) loss. The insured receives a contract, called the insurance policy, which
details the conditions and circumstances under which the insured will be
financially compensated.
What is a Savings
Institution?
Saving banks- The savings banks are especially for those who belong to the low
income groups or those who are salaried. The savings banks
function with the intention to help people culminate the saving
habits, which is especially for those who belong to the lower
income groups or those who are salaried. The post office is also
in a way a saving bank, where people can open recurring
accounts to save money.
Commercial Banks-
The main function of these types of banks is to give financial services to the
entrepreneurs and businesses. It gives financial to the businessmen like providing
them with debit cards, banks accounts, short term deposits, etc. with the money
deposited by people in such banks. The commercial banks also lend money to
these businessmen in the form of secured loans, unsecured loans, credit cards,
overdrafts and mortgage loans.
Banks allow people to
open accounts to which
they can deposit there
surplus finance to which
in returns they pay an
interest on the amount by
which not only money is
saved but also increase
money ..
The Post Office Savings Bank has emerged from its limited role of
providing the poor people with a safe means of securing their savings to
a major instrument for mobilising savings for meeting development
expenditure of the Nation and the State as well. The Government have
been introducing various schemes from time to time to suit the varying
requirements of individuals .
Credit Union-
A credit union is very similar to a bank in services rendered, but varies in the
way that it provides those services.
Credit unions are nonprofit organizations that are owned by the people who
deposit money into accounts. Credit unions are exempt from paying taxes
on this deposited money because of their nonprofit role.
Account holders are considered members of the credit union and deposits
are seen as “buying shares” in the credit union. Customers must meet
specific credit union qualification criteria to join. These members are paid
dividends on the credit unions’ earnings, much as shareholders are paid
dividends on a company’s stock earnings.
Credit unions most often operate on the local level. Members share some
sort of connection, often an occupation or social status. Because credit
unions generally have fewer customers and fewer employees than banks,
the interpersonal connections between the two are often stronger than
those in banks.