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Financial (Money) Management

Course CodeBBS104
Fee CodeS2
Duration (approx)100 hours
QualificationStatement of Attainment

MONEY MANAGEMENT ONLINE COURSE

Learn how to take charge and make your money work for you!

Learn how to accumulate, borrow, spend, invest and save money. While some people have an intuitive ability with money, others need to take a much more conscious approach to managing it, if they are to increase their assets. It aims to improve your ability to make better decisions about managing finances.

Throughout the course the student will develop their ability to make better choices with respect to the following sorts of issues:

  • Investing money
  • Capitalizing on your home
  • Buying more economically to cut food bills
  • Minimizing taxation
  • Bulk buying to minimize costs
  • Figuring out how much to keep in reserve for a "rainy day"
  • Restructuring your personal budget.
All of these problems and more are dealt with throughout this comprehensive guide to money management. Enrol now to improve your money management skills.  Can you afford not to?

Lesson Structure

There are 10 lessons in this course:

  1. Get to know Financial Terminology
  2. Managing/Planning your Money
  3. Borrowing - Against your home, for goods. Learn about various types of loans, overdrafts, credit cards, financing a business etc.
  4. Buying Guide -What to look for, hidden traps, consumer protection, deciding when not to buy on credit, forms of credit.
  5. Money Market Operations
  6. Investing -In housing, land, stocks, bonds, trust funds, antiques, business investments, insurance (annuities) and more.
  7. Superannuation -Lump sum, roll over etc.
  8. Cost Cutting - how and where
  9. Banks - Utilise them.
  10. Communication - Dealing with people in finance.

Each lesson culminates in an assignment which is submitted to the school, marked by the school's tutors and returned to you with any relevant suggestions, comments, and if necessary, extra reading.

What You Will Do

  • Goals for financial management, Financial terminology/language, Financial statements
  • Budgeting,Cash flows, P&L, Balance sheet, Financial records, Problem solving
  • Types of loans/Sources of funds, Getting a mortgages to suit you, Credit card control,
    • Debt Management
  • Do you need to buy? The best time to buy. Which is the cheapest? Buying and the law/Consumer protection. Buying business. Buying property.
  • What is an investment? Types of investments. Housing, land, stocks, bonds, trust funds, antiques, business investments, insurance (annuities) and more. Buying shares. Spread your investment, investment appraisals.
  • Lifetime guide to money matters:-
    • Managing your cash, debt, insurance, housing, strategic planning.
    • Making your own money, Using your money, Keeping your money, Counting your money,
    • Enjoying your money, Investing in shares, Buying or starting a business.
  • Handling lump sums, Investment options, Superannuation for: Employees, Employers
  • Methods of cost saving, Alternative Living, Reducing the cost of credit. Use your property,
    • Organizing your finances
  • E-commerce, Bank clearing house, Choosing a bank, Types of banks, Bank fees,
    • Getting the most from your bank, including reduced credit card rates.
  • Dealing with financial experts, bank managers, accountants and others in the financial world.
  • Using the right financial terminology

Do You Know Your Own Finances?

Everyone should make it their business to know their own balance sheet is at any given time. Know the summation of your assets and your total liabilities. It gives an indication of your financial position. If you have a lot of debt, then your assets should ideally be high. But if you are borrowing money and spending it on purely expenses and not assets, you need to consider the fact that your asset value is likely to be low, your liabilities high and your finances in a bad state. Consider the impact this will have on your future lifestyle and potential borrowing power. If you are going to borrow money, then put it to good use and ensure you have a growing asset value.

Even though cars are considered assets, they rarely appreciate in value. If you are borrowing money and paying interest to own one, you might want to think about other more positive ways you could use that extra cash. Buying a cheap but reliable car for cash and then borrowing money in to invest in property/shares is likely to yield a far better future balance sheet, than spending on assets that do not appreciate. When you invest in an asset that goes up in value, and reinvest the interest/income, your money compounds over time. This is the way to grow wealth and have a balance sheet that will enable you to sleep better at night.

Managing Finance

Managing financial resources applies to individuals and businesses. Every month you should check income against debts and expenditure. You'll be surprised at the incredible fluctuations that can occur. Also you are checking against going into the "red" i.e. becoming overdrawn.

No matter how much money you earn, some of your income should be put aside and saved. There are three stages in your life when savings/investing are at an optimum. They are

  •  when you cohabit a lodging with another person and share expenses,
  •  when you are living at home and are a wage earner, or
  •  when your children have finally left home, you are both working and your mortgage is greatly reduced.

However, it is all very well to convince yourself that starting your savings program can wait until you are established and earning more, or until the children leave home, but that way you may never start. Saving is a habit, a healthy one at that! It is best to establish the habit from the outset, by for example, setting a savings target which you can achieve, such as five per cent of your take home pay. For people who cannot start a savings habit, another option is to have money automatically deducted from your pay. If that fails, take out a personal loan, invest it at 12% – your repayments will then be your compulsory savings.

We all need some money set aside for that rainy day; as a rough guide, a “safety net” fund equal to three months take-home pay is advisable. This money should be deposited where it will earn interest but is also absolutely safe and accessible at very short notice such as a few days should you need it to deal with an emergency. A term savings account with a bank, credit union or building society, is suitable for this purpose, provided of course you can draw on the account without having to wait a period of months. A cash management trust is also suitable for this purpose but anything less liquid or more risky is best avoided when planning where to keep “rainy day” money.

Once that initial buffer is there keep saving! But you can now afford to be a bit more adventurous you can invest in long term propositions in which your money is less accessible but which offer a slightly higher return.

Following finance news so that you are aware of changes in interest rates, general trends in currencies and share prices will help you to keep a sharp eye on your investments.

Money governs what can be done in any situation. Careful management of money should always provide better value for the pound spent, but even more than that, an awareness of monies available will enable a manager to make informed decisions on what can be afforded at any one time.

There are two aspects to financial management: 

1. BUDGET
This is a plan of what can and should be spent over a given period of time. It is an itemised account of what things money should be spent on, and how much should be allocated for each item.

Zero Budgeting
Some businesses may decide to operate a zero budget. This approach sets each department’s budget at zero and demands that budget holders justify every pound they ask for. This helps to avoid the trend of budgets increasing year on year. The zero budgeting tool can also be adapted to suit personal financial management. For example, do you really need a monthly budget for clothing/shoes/other luxury items? Will you spend it unnecessarily simply because it is there?

Budgets are normally prepared for a 12 month period and are based upon what has happened over the previous 12 months.

2. FINANCIAL RECORDS
A managed system of books or computer files, keeping track of what is spent when and where; paying accounts, making purchases, authorising and making payments, receiving money, sending bills to customers etc. are known as financial records.

The financial records should be close to what has been budgeted for, and the budget should be based upon what has been recorded in the financial records.
 
 

Business Funding

Don’t underestimate the amount of money you will need to finance your business as this is the fastest way to failure.

There are many ways to fund the set-up of a business:

  • Use your own savings.
  • Use your own assets (liquidate them).
  • Borrow against your assets (mortgage or equity release).
  • Bank overdraft or loan.
  • Credit cards.
  • Business grants.
  • Private investors.
  • Borrow from family.
  • Keep your job until you are generating adequate turn-over.

No matter how you decide to fund your business - you need to ensure that you:

  • Have sufficient money to set up the business.
  • Have sufficient funds to run the business until it starts to generate income.
  • Will make enough profit to make the business viable (i.e. continue with the business).

Where and how you borrow money will depend on what you are planning to do. However when taking out large loans from a bank or anyone, ensure that you are able to repay the loan.
Funding your business by using the equity in your family home can lead to disaster – if your business fails you may also lose your home.

GENERAL RULES OF BUSINESS FUNDING

Every business is different, but some general rules of thumb apply:

  • The faster the start-up, the more initial capital you need.
  • Hold a contingency fund: you should always hold a significant percentage of money in reserve (estimate what you need for a start up and be in a position to get double that amount of money if needed.
  • Don’t invest any more than what you are prepared to lose.
     

BUSINESS SET-UP COSTS

When thinking about the costs of setting out your new business. Ensure that you have taken everything into account. It is easy to miss off important costs that can actually affect the profitability of your business. 

Consider:

  • Postage/courier costs if you are planning to post out products to customers.
  • Postage costs for other things e.g. marketing; mail outs, sending out brochures etc.
  • Staffing costs (wages, insurance, holiday pay, sick pay, pension funds etc.)
  • Travel costs to and from work.  If you are a one man/woman business and decide to set up an office 50 miles away from your home, this would involve a lot of additional travel costs. So consider, would a business nearer home be more advisable? Could you actually work from home at first?
  • Telephone costs – landline and mobile
  • Internet costs 
  • Equipment – computers, franking machines, photocopiers, desks, chairs, shop fittings etc.
  • Stationery
  • Advertising costs
  • Rental of your office/storeroom 
  • Purchasing an office/storeroom 
  • Storage costs
  • Taxation 
  • Marketing your product (other than postage)
  • Brochure designs
  • Logo designs
  • Website designs
  • Other costs – such as toilet rolls, washing up liquid, coffee, tea, milk, biscuits and cleaning products for your business premises.

 

As you progress through the course, you will learn that this is obviously not an exhaustive list; and that different things will be required for different businesses.



Meet some of our academics

David CrothersChartered Accountant with 20 years experience in corporate and financial roles. David has a FCA, GAICD, B.Sc.Econ (Hons), Cert IV TAA. Extensive international experience in business and finance.
Sonia Andrews15 years experience in business, bookkeping and accounting.
Denise Hodges Promotions Manager for ABC retail, Fitness Programmer/Instructor, Small Business Owner, Marketing Coordinator (Laserpoint). Over 20 years varied experienced in business and marketing. More recently Denise studied naturopathy to share her passion for health and wellness. Denise has an Adv.Dip.Bus., Dip. Clothing Design, Adv.Dip.Naturopathy (completing).