Personal Finance
Personal Finance
7th Edition
ISBN: 9780134989969
Author: Madura, Jeff
Publisher: Pearson,
Question
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Chapter 6, Problem 1RQ
Summary Introduction

To discuss: Money management and its difference from long-term investments or decisions on borrowing.

Expert Solution & Answer
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Explanation of Solution

Money management refers to the process used to save, spend, and invest on the required and best resources during a short period. The decisions that are made in relation to cash inflows and outflows constitute money management.

The main difference between money management and long-term investments is that the decision taken will be for on a shorter period under money management whereas it will be for a longer term under long-term investment. Money management focuses on adequate returns from the investments and helps in achieving liquidity, which is opposed to the borrowing decisions and long-term investments.

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