1. How does the expression a bird in the hand is worth two in the bush relate to the concept of the time value of money?

2. In what four ways can delay to liquidity affect the value of a persons wealth?

3. On your own, consider the following questions. You do not need to post your responses to this prompt for the entire group to see.

a) Where does your income come from, and where does it go? Analyze your inflows of income from all sources and outgoes of income through expenditures in a month, quarter, or year. How would you like your income to change? How would you like your distribution of expenses to change? Use your investigation to develop a rough personal budget if you dont already have one.

b) Examine your budget and distinguish between wants and needs. How do you define a financial need? What are your fixed expenses or costs you must pay regularly each week, month, or year? Which of your budget categories must you provide for first before satisfying others? To what extent is each of your expenses discretionary under your control in terms of spending for that item or resource? Which of your expenses could you reduce if you had to or wanted to for any reason?

c) If you had a budget deficit, what could you do about it? What would be the best solution for the long term? If you had a budget surplus, what could you do about it? What would be your best choice, and why?