This is a paper that is focusing on the Steve Spender discussion prompt on cash management. The paper also provides a brief discussion on the cash management view by Benjamin Franklin.
Steve Spender discussion prompt on cash management
The principles of cash management were best summed up by Benjamin Franklin when he wrote: “A penny saved is a penny earned.” Financial management is an important part of financial planning. The term cash management is the process of collecting and managing and investing cash for the short term. An increase in competition and a reduction in banking regulations have resulted in a much different environment for managing cash and short-term liquid assets today. Objectives: • Understand the role of cash management in the personal financial planning process. • Understand the system of checking and savings accounts. • Identify the various services of the financial institution of banking. • Understand the process in buying an automobile. • Identify the variable in renting or buying a home.
Discussion Prompt 1: Steve Spender
After reading the leader from Steve Spender, write a response to answer his question.
Dear Saving Expert, My name is Steve Spender, and I am rather confused about the concept of saving. My friends tell me I should save money, but I do not understand why. What is savings, and why do I need to save money? I enjoy playing basketball, and I really need a new pair of shoes before basketball practice starts next week. With new shoes I could be so much faster on the court! I asked my grandma if I could have a new pair of shoes, and she told me that I would have to save money in order to buy a new pair. Why is this? I need the new shoes right away. Why can’t my grandma buy them for me now?
I have a pickle jar that I place my loose coins in every night, but my friends say this is not the best method for me to save money.
My friends tell me I should consider saving my money at a depository institution. What is a depository institution? Why would saving my money at a depository institution be better than saving money in my pickle jar? The coins in my jar seem to be accumulating really slowly. At this rate I am never going to have enough money to purchase my basketball shoes! I don’t understand why this is. I only use the money in my pickle jar to buy a pack of gum every week.
How can I save money faster? I hope you can answer my questions, because I really need those new shoes!