Friday, January 12, 2024

Computers and software

Computers and software

Designers disagree whether computers enhance the creative process.[40] Some designers argue that computers allow them to explore multiple ideas quickly and in more detail than can be achieved by hand-rendering or paste-up.[41] While other designers find the limitless choices from digital design can lead to paralysis or endless iterations with no clear outcome.

Most designers use a hybrid process that combines traditional and computer-based technologies. First, hand-rendered layouts are used to get approval to execute an idea, then the polished visual product is produced on a computer.

Graphic designers are expected to be proficient in software programs for image-making, typography and layout. Nearly all of the popular and "industry standard" software programs used by graphic designers since the early 1990s are products of Adobe Inc. Adobe Photoshop (a raster-based program for photo editing) and Adobe Illustrator (a vector-based program for drawing) are often used in the final stage. CorelDraw, a vector graphics editing software developed and marketed by Corel Corporation, is also used worldwide. Designers often use pre-designed raster images and vector graphics in their work from online design databases. Raster images may be edited in Adobe Photoshop, vector logos and illustrations in Adobe Illustrator and CorelDraw, and the final product assembled in one of the major page layout programs, such as Adobe InDesign, Serif PagePlus and QuarkXPress.

Many free and open-source programs are also used by both professionals and casual graphic designers. Inkscape uses Scalable Vector Graphics (SVG) as its primary file format and allows importing and exporting other formats. Other open-source programs used include GIMP for photo-editing and image manipulation, Krita for digital painting, and Scribus for page layout.

Related design fields

Interface design

Main article: User interface design

Since the advent of personal computers, many graphic designers have become involved in interface design, in an environment commonly referred to as a Graphical user interface (GUI). This has included web design and software design when end user-interactivity is a design consideration of the layout or interface. Combining visual communication skills with an understanding of user interaction and online branding, graphic designers often work with software developers and web developers to create the look and feel of a web site or software application. An important aspect of interface design is icon design.

User experience design

User experience design (UX) is the study, analysis, and development of creating products that provide meaningful and relevant experiences to users. This involves the creation of the entire process of acquiring and integrating the product, including aspects of branding, design, usability, and function. UX design involves creating the interface and interactions for a website or application, and is considered both an act and an art. This profession requires a combination of skills, including visual design, social psychology, development, project management, and most importantly, empathy towards the end-users.[42]

Experiential graphic design

Experiential graphic design is the application of communication skills to the built environment.[43] This area of graphic design requires practitioners to understand physical installations that have to be manufactured and withstand the same environmental conditions as buildings. As such, it is a cross-disciplinary collaborative process involving designers, fabricators, city planners, architects, manufacturers and construction teams.

Experiential graphic designers try to solve problems that people encounter while interacting with buildings and space (also called environmental graphic design). Examples of practice areas for environmental graphic designers are wayfinding, placemaking, branded environments, exhibitions and museum displays, public installations and digital environments. 

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Skills - graphic design

Skills

A graphic design project may involve the creative presentation of existing text, ornament, and images.

The "process school" is concerned with communication; it highlights the channels and media through which messages are transmitted and by which senders and receivers encode and decode these messages. The semiotic school treats a message as a construction of signs which through interaction with receivers, produces meaning; communication as an agent.[citation needed]

Typography

Main article: Typography

Typography includes type design, modifying type glyphs and arranging type. Type glyphs (characters) are created and modified using illustration techniques. Type arrangement is the selection of typefaces, point size, tracking (the space between all characters used), kerning (the space between two specific characters) and leading (line spacing).

Typography is performed by typesetters, compositors, typographers, graphic artists, art directors, and clerical workers. Until the digital age, typography was a specialized occupation. Certain fonts communicate or resemble stereotypical notions. For example, 1942 Report is a font which types text akin to a typewriter or a vintage report.[36]

Page layout

Further information: Grid (graphic design)
Golden section in book design

Page layout deals with the arrangement of elements (content) on a page, such as image placement, text layout and style. Page design has always been a consideration in printed material and more recently extended to displays such as web pages. Elements typically consist of type (text), images (pictures), and (with print media) occasionally place-holder graphics such as a dieline for elements that are not printed with ink such as die/laser cutting, foil stamping or blind embossing.

Grids

A grid serves as a method of arranging both space and information, allowing the reader to easily comprehend the overall project. Furthermore, a grid functions as a container for information and a means of establishing and maintaining order. Despite grids being utilized for centuries, many graphic designers associate them with Swiss design. The desire for order in the 1940s resulted in a highly systematic approach to visualizing information. However, grids were later regarded as tedious and uninteresting, earning the label of "designersaur." Today, grids are once again considered crucial tools for professionals, whether they are novices or veterans.[37]

Tools

In the mid-1980s desktop publishing and graphic art software applications introduced computer image manipulation and creation capabilities that had previously been manually executed. Computers enabled designers to instantly see the effects of layout or typographic changes, and to simulate the effects of traditional media. Traditional tools such as pencils can be useful even when computers are used for finalization; a designer or art director may sketch numerous concepts as part of the creative process.[38] Styluses can be used with tablet computers to capture hand drawings digitally.[39]

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Graphic design

From Wikipedia, the free encyclopedia
Due to its interdisciplinary nature, graphic design can be performed in different areas of application: branding, technical and artistic drawing, signage, photography, image and video editing, 3D modeling, animation, programming, among other fields.[1]

Graphic design is a profession,[2] academic discipline[3][4][5] and applied art whose activity consists in projecting visual communications intended to transmit specific messages to social groups, with specific objectives.[6] Graphic design is an interdisciplinary branch of design[1] and of the fine arts. Its practice involves creativity, innovation and lateral thinking using manual or digital tools, where it is usual to use text and graphics to communicate visually.

The role of the graphic designer in the communication process is that of encoder or interpreter of the message. They work on the interpretation, ordering, and presentation of visual messages. Usually, graphic design uses the aesthetics of typography and the compositional arrangement of the text, ornamentation, and imagery to convey ideas, feelings, and attitudes beyond what language alone expresses. The design work can be based on a customer's demand, a demand that ends up being established linguistically, either orally or in writing, that is, that graphic design transforms a linguistic message into a graphic manifestation.[7]

Graphic design has, as a field of application, different areas of knowledge focused on any visual communication system. For example, it can be applied in advertising strategies, or it can also be applied in the aviation world[8] or space exploration.[9][10] In this sense, in some countries graphic design is related as only associated with the production of sketches and drawings, this is incorrect, since visual communication is a small part of a huge range of types and classes where it can be applied.

With origins in Antiquity and the Middle Ages,[11] graphic design as applied art was initially linked to the boom of rise of printing in Europe in the 15th century and the growth of consumer culture in the Industrial Revolution. From there it emerged as a distinct profession in the West, closely associated with advertising in the 19th century[12] and its evolution allowed its consolidation in the 20th century. Given the rapid and massive growth in information exchange today, the demand for experienced designers is greater than ever, particularly because of the development of new technologies and the need to pay attention to human factors beyond the competence of the engineers who develop them.[13]

Terminology

William Addison Dwiggins is often credited with first using the term "graphic design" in a 1922 article,[14] although it appears in a 4 July 1908 issue (volume 9, number 27) of Organized Labor, a publication of the Labor Unions of San Francisco, in an article about technical education for printers:[15]

An Enterprising Trades Union
… The admittedly high standard of intelligence which prevails among printers is an assurance that with the elemental principles of design at their finger ends many of them will grow in knowledge and develop into specialists in graphic design and decorating. …

A decade later, the 1917–1918 course catalog of the California School of Arts & Crafts advertised a course titled Graphic Design and Lettering, which replaced one called Advanced Design and Lettering. Both classes were taught by Frederick Meyer.[16]

History

In both its lengthy history and in the relatively recent explosion of visual communication in the 20th and 21st centuries, the distinction between advertising, art, graphic design and fine art has disappeared. They share many elements, theories, principles, practices, languages and sometimes the same benefactor or client. In advertising, the ultimate objective is the sale of goods and services. In graphic design, "the essence is to give order to information, form to ideas, expression, and feeling to artifacts that document the human experience."[17]

The definition of the graphic designer profession is relatively recent concerning its preparation, activity, and objectives. Although there is no consensus on an exact date when graphic design emerged, some date it back to the Interwar period. Others understand that it began to be identified as such by the late 19th century.[11]

It can be argued that graphic communications with specific purposes have their origins in Paleolithic cave paintings and the birth of written language in the third millennium BCE. However, the differences in working methods, auxiliary sciences, and required training are such that it is not possible to clearly identify the current graphic designer with prehistoric man, the 15th-century xylographer, or the lithographer of 1890.

The diversity of opinions stems from some considering any graphic manifestation as a product of graphic design, while others only recognize those that arise as a result of the application of an industrial production model—visual manifestations that have been "projected" to address various needs: productive, symbolic, ergonomic, contextual, among others.

Nevertheless, the evolution of graphic design as a practice and profession has been closely linked to technological innovations, social needs, and the visual imagination of professionals.[18] Graphic design has been practiced in various forms throughout history; in fact, good examples of graphic design date back to manuscripts from ancient China, Egypt, and Greece. As printing and book production developed in the 15th century, advances in graphic design continued over the subsequent centuries, with composers or typographers often designing pages according to established type.[11]

By the late 19th century, graphic design emerged as a distinct profession in the West, partly due to the process of labor specialization that occurred there and partly due to the new technologies and business possibilities brought about by the Industrial Revolution. New production methods led to the separation of the design of a communication medium (such as a poster) from its actual production. Increasingly, throughout the 19th and early 20th centuries, advertising agencies, book publishers, and magazines hired art directors who organized all visual elements of communication and integrated them into a harmonious whole, creating an expression appropriate to the content. In 1922, typographer William A. Dwiggins coined the term graphic design to identify the emerging field.[11]

Throughout the 20th century, the technology available to designers continued to advance rapidly, as did the artistic and commercial possibilities of design. The profession expanded greatly, and graphic designers created, among other things, magazine pages, book covers, posters, CD covers, postage stamps, packaging, brands, signs, advertisements, kinetic titles for TV programs and movies, and websites. By the early 21st century, graphic design had become a global profession as advanced technology and industry spread worldwide.[11]

Historical background

Main article: History of printing

In China, during the Tang dynasty (618–907) wood blocks were cut to print on textiles and later to reproduce Buddhist texts. A Buddhist scripture printed in 868 is the earliest known printed book. Beginning in the 11th century in China, longer scrolls and books were produced using movable type printing, making books widely available during the Song dynasty (960–1279).[19]

In the mid-15th century in Mainz, Germany, Johannes Gutenberg developed a way to reproduce printed pages at a faster pace using movable type made with a new metal alloy[20] that created a revolution in the dissemination of information.[21]

Nineteenth century

In 1849, Henry Cole became one of the major forces in design education in Great Britain, informing the government of the importance of design in his Journal of Design and Manufactures. He organized the Great Exhibition as a celebration of modern industrial technology and Victorian design.

From 1891 to 1896, William Morris' Kelmscott Press was a leader in graphic design associated with the Arts and Crafts movement, creating hand-made books in medieval and Renaissance era style,[22] in addition to wallpaper and textile designs.[23] Morris' work, along with the rest of the Private Press movement, directly influenced Art Nouveau.[24]

Cover of the Thanksgiving 1895 issue of The Chap-Book, designed by Will H. Bradley

Will H. Bradley became one of the notable graphic designers in the late nineteenth-century due to creating art pieces in various Art Nouveau styles. Bradley created a number of designs as promotions for a literary magazine titled The Chap-Book.[25]

Twentieth century

A Boeing 747 aircraft with livery designating it as Air Force One. The cyan forms, the US flag, presidential seal and the Caslon lettering, were all designed at different times, by different designers, for different purposes, and combined by designer Raymond Loewy in this one single aircraft exterior design.

In 1917, Frederick H. Meyer, director and instructor at the California School of Arts and Crafts, taught a class entitled "Graphic Design and Lettering".[26] Raffe's Graphic Design, published in 1927, was the first book to use "Graphic Design" in its title.[27] In 1936, author and graphic designer Leon Friend published his book titled "Graphic Design" and it is known to be the first piece of literature to cover the topic extensively.[28]

The signage in the London Underground is a classic design example[29] of the modern era. Although he lacked artistic training, Frank Pick led the Underground Group design and publicity movement. The first Underground station signs were introduced in 1908 with a design of a solid red disk with a blue bar in the center and the name of the station. The station name was in white sans-serif letters. It was in 1916 when Pick used the expertise of Edward Johnston to design a new typeface for the Underground. Johnston redesigned the Underground sign and logo to include his typeface on the blue bar in the center of a red circle.[30]

In the 1920s, Soviet constructivism applied 'intellectual production' in different spheres of production. The movement saw individualistic art as useless in revolutionary Russia and thus moved towards creating objects for utilitarian purposes. They designed buildings, theater sets, posters, fabrics, clothing, furniture, logos, menus, etc.[31]

Jan Tschichold codified the principles of modern typography in his 1928 book, New Typography.[32] He later repudiated the philosophy he espoused in this book as fascistic, but it remained influential.[citation needed] Tschichold, Bauhaus typographers such as Herbert Bayer and László Moholy-Nagy and El Lissitzky greatly influenced graphic design. They pioneered production techniques[citation needed] and stylistic devices used throughout the twentieth century. The following years saw graphic design in the modern style gain widespread acceptance and application.[33]

The professional graphic design industry grew in parallel with consumerism. This raised concerns and criticisms, notably from within the graphic design community with the First Things First manifesto. First launched by Ken Garland in 1964, it was re-published as the First Things First 2000 manifesto in 1999 in the magazine Emigre 51[34] stating "We propose a reversal of priorities in favor of more useful, lasting and democratic forms of communication – a mindshift away from product marketing and toward the exploration and production of a new kind of meaning. The scope of debate is shrinking; it must expand. Consumerism is running uncontested; it must be challenged by other perspectives expressed, in part, through the visual languages and resources of design."[35]

Applications

Colour

Graphic design can have many applications, from road signs to technical schematics and reference manuals. It is often used in branding products and elements of company identity such as logos, colors, packaging, labelling and text.

From scientific journals to news reporting, the presentation of opinion and facts is often improved with graphics and thoughtful compositions of visual information – known as information design. With the advent of the web, information designers with experience in interactive tools are increasingly used to illustrate the background to news stories. Information design can include Data and information visualization, which involves using programs to interpret and form data into a visually compelling presentation, and can be tied in with information graphics

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Thursday, January 11, 2024

Design protection

Design protection

Logos and their design may be protected by copyright, via various intellectual property organisations worldwide which make available application procedures to register a design to give it protection at law. For example, in the UK, the Intellectual Property Office (United Kingdom)[26] govern registered designs, patents, and trademarks. Ordinarily, the trademark registration will not 'make claim' to colors used, meaning it is the visual design that will be protected, even if it is reproduced in a variety of other colors or backgrounds.

In some countries, especially civil law countries, the threshold of originality required for copyright protection can be quite high, so a logo that contains simple geometric shapes or text might not be eligible for copyright protection although it can be protected as a trademark.

Sports

For many teams, a logo or "crest" is an important way to recognize a team's history and can intimidate opponents. For certain teams, the logo and color scheme are synonymous with the team's players. For example, Manchester United, the Toronto Maple Leafs, or New York Yankees all have a recognizable logo that can be identified by any fan of the respective sport.

See also

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Logo design

Logo design

Since a logo is the visual entity signifying an organization, logo design is an important area of graphic design. A logo is the central element of a complex identification system that must be functionally extended to all communications of an organization. Therefore, the design of logos and their incorporation in a visual identity system is one of the most difficult and important areas of graphic design. Logos fall into three classifications (which can be combined). Ideographs, such as Chase Bank, are completely abstract forms; pictographs are iconic, representational designs; logotypes (or wordmarks) depict the name or company initials. These elements can be combined in a set position and relative size in a logo lock-up, so named because elements are "locked" together and should not be broken apart or resized individually.[16] Because logos are meant to represent companies' brands or corporate identities and foster their immediate customer recognition, it is counterproductive to frequently redesign logos.

The logo design profession has substantially increased in numbers over the years since the rise of the Modernist movement in the United States in the 1950s.[17] Three designers are widely[18] considered the pioneers of that movement and of logo and corporate identity design: The first is Chermayeff & Geismar,[19] which is the firm responsible for many iconic logos, such as Chase Bank (1964), Mobil Oil (1965), PBS (1984), NBC (1986), National Geographic (2003), and others. Due to the simplicity and boldness of their designs, many of their earlier logos are still in use today. The firm recently designed logos for the Library of Congress and the fashion brand Armani Exchange. Another pioneer of corporate identity design is Paul Rand,[20] who was one of the originators of the Swiss Style of graphic design. He designed many posters and corporate identities, including the famous logos for IBM, UPS, and ABC. The third pioneer of corporate identity design is Saul Bass.[21] Bass was responsible for several recognizable logos in North America, including both the Bell Telephone logo (1969) and successor AT&T Corporation globe (1983). Other well-known designs were Continental Airlines (1968), Dixie (1969), and United Way (1972). Later, he would produce logos for a number of Japanese companies as well. An important development in the documentation of logo design is the study of French trademarks by historian Edith Amiot and philosopher Jean Louis Azizollah.[22]

Logo color

Color is a key element in logo design and plays an important and potentially vital role in brand differentiation. Colors can have immense consequences on our moods. They are remarkably dominant to the point that they can psychologically manipulate perspectives, emotions, and reactions.[23] The importance of color in this context is due to the mechanics of human visual perception wherein color and contrast play critical roles in visual detail detection. In addition, we tend to acquire various color connotations and color associations through social and cultural conditioning, and these play a role in how we decipher and evaluate logo color. While color is considered important to brand recognition and logo design, it should not conflict with logo functionality, and it needs to be remembered that color connotations and associations are not consistent across all social and cultural groups. For example, in the United States, red, white, and blue are often used in logos for companies that want to project patriotic feelings but other countries will have different sets of colors that evoke national pride.

Choosing an organisation's logo's color is an important decision because of its long term implications and its role in creating differentiation among competitors' logos. A methodology for identifying potential logo colors within an industry sector is color mapping, whereby existing logo colors are systematically identified, mapped, and evaluated (O'Connor, 2011).[24]

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Contemporary logos

Contemporary logos

Red Cross and Red Crescent emblems

The current era of logo design began in the 1870s[citation needed] with the first abstract logo, the Bass red triangle. As of 2014, many corporations, products, brands, services, agencies, and other entities use an ideogram (sign, icon) or an emblem (symbol) or a combination of sign and emblem as a logo. As a result, only a few of the thousands of ideograms in circulation are recognizable without a name. An effective logo may consist of both an ideogram and the company name (logotype) to emphasize the name over the graphic, and employ a unique design via the use of letters, colors, and additional graphic elements.

The Coca-Cola logo is identifiable in other writing-systems, here written in Cyrillic.

Ideograms and symbols may be more effective than written names (logotypes), especially for logos translated into many alphabets in increasingly globalized markets. For instance, a name written in Arabic script might have little resonance in most European markets. By contrast, ideograms keep the general proprietary nature of a product in both markets. In non-profit areas, the Red Cross (varied as the Red Crescent in Muslim countries and as the Red Star of David in Israel) exemplifies a well-known emblem that does not need an accompanying name. The red cross and red crescent are among the best-recognized symbols in the world. National Red Cross and Red Crescent Societies and their Federation as well as the International Committee of the Red Cross include these symbols in their logos.

Branding can aim to facilitate cross-language marketing.[14] Consumers and potential consumers can identify the Coca-Cola name written in different alphabets because of the standard color and "ribbon wave" design of its logo. The text was written in Spencerian Script, which was a popular writing style when the Coca-Cola Logo was being designed.[15]

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Logo

From Wikipedia, the free encyclopedia
"Logotype" redirects here. For the racehorse, see Logotype (horse).
This article is about the graphic mark or emblem. For other uses, see Logo (disambiguation).
Three logos: NASA, IBM by Paul Rand and the International Bureau of Weights and Measures. Coat of arms of the Chiswick Press

A logo (abbreviation of logotype;[1] from Ancient Greek λόγος (lógos) 'word, speech', and τύπος (túpos) 'mark, imprint') is a graphic mark, emblem, or symbol used to aid and promote public identification and recognition. It may be of an abstract or figurative design or to include the text of the name that it represents as in a wordmark.

In the days of hot metal typesetting, a logotype was one word cast as a single piece of type (e.g. "The" in ATF Garamond), as opposed to a ligature, which is two or more letters joined, but not forming a word.[2] By extension, the term was also used for a uniquely set and arranged typeface or colophon. At the level of mass communication and in common usage, a company's logo is today often synonymous with its trademark or brand.[3]

Etymology

Douglas Harper's Online Etymology Dictionary states that the term 'logo' used in 1937 "probably a shortening of logogram".[4]

History

Numerous inventions and techniques have contributed to the contemporary logo, including cylinder seals (c. 2300 BCE), coins (c. 600 BCE),[5][6] trans-cultural diffusion of logographic languages, coats of arms,[7] watermarks,[8] silver hallmarks, and the development of printing technology.

As the industrial revolution converted western societies from agrarian to industrial in the 18th and 19th centuries, photography and lithography contributed to the boom of an advertising industry that integrated typography and imagery together on the page.[9] Simultaneously, typography itself was undergoing a revolution of form and expression that expanded beyond the modest, serif typefaces used in books, to bold, ornamental typefaces used on broadsheet posters.[10]

The arts were expanding in purpose—from expression and decoration of an artistic, storytelling nature, to a differentiation of brands and products that the growing middle classes were consuming. Consultancies and trades-groups in the commercial arts were growing and organizing; by 1890, the US had 700 lithographic printing firms employing more than 8,000 people.[11] Artistic credit tended to be assigned to the lithographic company, as opposed to the individual artists who usually performed less important jobs.

A coin from early 6th century BC Lydia bearing the head of a roaring lion with sun rays

Innovators in the visual arts and lithographic process—such as French printing firm Rouchon in the 1840s, Joseph Morse of New York in the 1850s, Frederick Walker of England in the 1870s, and Jules Chéret of France in the 1870s—developed an illustrative style that went beyond tonal, representational art to figurative imagery with sections of bright, flat colors.[11] Playful children's books, authoritative newspapers, and conversational periodicals developed their own visual and editorial styles for unique, expanding audiences. As printing costs decreased, literacy rates increased, and visual styles changed, the Victorian decorative arts led to an expansion of typographic styles and methods of representing businesses.[12]

The first logo to be trademarked was the Bass red triangle in 1876.

The Arts and Crafts Movement of late-19th century, partially in response to the excesses of Victorian typography, aimed to restore an honest sense of craftsmanship to the mass-produced goods of the era.[13] A renewal of interest in craftsmanship and quality also provided the artists and companies with a greater interest in credit, leading to the creation of unique logos and marks.

By the 1950s, Modernism had shed its roots as an avant-garde artistic movement in Europe to become an international, commercialized movement with adherents in the United States and elsewhere. The visual simplicity and conceptual clarity that were the hallmarks of Modernism as an artistic movement formed a powerful toolset for a new generation of graphic designers whose logos embodied Ludwig Mies van der Rohe's dictum, "Less is more." Modernist-inspired logos proved successful in the era of mass visual communication ushered in by television, improvements in printing technology, and digital innovations. 

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Wednesday, January 10, 2024

Personal budget

From Wikipedia, the free encyclopedia

Personal budgets are usually created to help an individual or a household of people to control their spending and achieve their financial goals.[3] Having a budget can help people feel more in control of their finances and make it easier for them to not overspend and to save money.[4][5] People who budget their money are less likely to obtain large debts, and are more likely to be able to lead comfortable retired lifes and to be prepared for emergencies.[6]

Methods of personal budgeting

In the most basic form of creating a personal budget the person needs to calculate their net income, track their spending over a set period of time, set goals based on the information previously gathered, make a plan to achieve these goals, and adjust their spending based on the plan.[4] There exist many methods of budgeting to help people do this.[7]

5 Essential Steps Budgeting

This method involves assessing one's financial situation, setting realistic financial goals, allocating income, tracking spending and adjusting the budget, and regularly reviewing and revising the budget. These steps can help individuals gain better control over their finances and achieve their financial goals.[8]

50/30/20 budget

The 50/30/20 budget is a simple plan that sorts personal expenses into three categories: "needs" (basic necessities), "wants", and savings. 50% of one's net income then goes towards needs, 30% towards wants, and 20% towards savings.[7]

Pay yourself first method (80/20 budget)

In the pay yourself first budget people first save at least 20% of their net income, and then freely spend the remaining 80%. They can also choose a 70/30, 60/40, or 50/50 budget for more savings. The most important part of this method is to put one's savings apart before spending on anything else.[7][9]

Sub-savings accounts method

This method is a variation of the pay yourself first budget, in which people create multiple savings accounts, each for one specific goal (such as a vacation or a new car), and each with an amount of money that should be reached by a specific date. They then divide the amount of money needed by the timeline to calculate how much they should save each month.[7]

Envelope method (cash-only budgeting)

Personal budget in an Excel sheet

For this method, people need to use cash instead of debit or credit cards. They need to allocate their net income into categories (e.g. groceries), withdraw the cash allocated for each category, and put them into envelopes. Any time they want to buy something in one of the categories, they only take the designated envelope so that they cannot overspend.[10]

Zero-based budgeting

In zero-based budgeting, all of one's net income must be allocated ahead of spending.[10] Zero-based budgeting involves dividing income into different expense categories, ensuring that all funds have been assigned a purpose, and at the end of the month there is a zero balance in the budget.[11]

Personal finance softwares and apps

Several personal finance softwares and mobile apps have been developed to help people with managing their money. Some of them can be used for budgeting and expense tracking, others mainly for one's investment portfolio. There are both free and paid options.[12]

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Financial plan

In general usage, a financial plan is a comprehensive evaluation of an individual's current pay and future financial state by using current known variables to predict future income, asset values and withdrawal plans.[1] This often includes a budget which organizes an individual's finances and sometimes includes a series of steps or specific goals for spending and saving in the future. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan is sometimes referred to as an investment plan, but in personal finance, a financial plan can focus on other specific areas such as risk management, estates, college, or retirement.

Context of business

In business, "financial forecast" or "financial plan" can also refer to an annual projection of income and expenses for a company, division, or department;[2] see Budget § Corporate budget. More specifically, a financial plan can also refer to the three primary financial statements (balance sheet, income statement, and cash flow statement) created within a business plan. A financial plan can also be an estimation of cash needs and a decision on how to raise the cash, such as through borrowing or issuing additional shares in a company.[3]

Note that the financial plan may then contain prospective financial statements, which are similar, but different, to those of a budget. Financial plans are the entire financial accounting overview of a company. Complete financial plans contain all periods and transaction types. It's a combination of the financial statements which independently only reflect a past, present, or future state of the company. Financial plans are the collection of the historical, present, and future financial statements; for example, a (historical & present) costly expense from an operational issue is normally presented prior to the issuance of the prospective financial statements which propose a solution to said operational issue.

The confusion surrounding the term "financial plans" might stem from the fact that there are many types of financial statement reports. Individually, financial statements show either the past, present, or future financial results. More specifically, financial statements also only reflect the specific categories which are relevant. For instance, investing activities are not adequately displayed in a balance sheet. A financial plan is a combination of the individual financial statements and reflect all categories of transactions (operations & expenses & investing) over time.

Some period-specific financial statement examples include pro forma statements (historical period) and prospective statements (current and future period). Compilations are a type of service which involves "presenting, in the form of financial statements, information that is the representation of management".[4] There are two types of "prospective financial statements": financial forecasts & financial projections and both relate to the current/future time period. Prospective financial statements are a time period-type of financial statement which may reflect the current/future financial status of a company using three main reports/financial statements: cash flow statement, income statement, and balance sheet. "Prospective financial statements are of two types- forecasts and projections. Forecasts are based on management's expected financial position, results of operations, and cash flows."[5] Pro Forma statements take previously recorded results, the historical financial data, and present a "what-if": "what-if" a transaction had happened sooner.[6]

While the common usage of the term "financial plan" often refers to a formal and defined series of steps or goals, there is some technical confusion about what the term "financial plan" actually means in the industry. For example, one of the industry's leading professional organizations, the Certified Financial Planner Board of Standards, lacks any definition for the term "financial plan" in its Standards of Professional Conduct publication. This publication outlines the professional financial planner's job, and explains the process of financial planning, but the term "financial plan" never appears in the publication's text.[7]

The accounting and finance industries have distinct responsibilities and roles. When the products of their work are combined, it produces a complete picture, a financial plan. A financial analyst studies the data and facts (regulations/standards), which are processed, recorded, and presented by accountants. Normally, finance personnel study the data results - meaning what has happened or what might happen - and propose a solution to an inefficiency. Investors and financial institutions must see both the issue and the solution to make an informed decision. Accountants and financial planners are both involved with presenting issues and resolving inefficiencies, so together, the results and explanation are provided in a financial plan.

Issues of definition

Textbooks used in universities offering financial planning-related courses also generally do not define the term 'financial plan'. For example, Sid Mittra, Anandi P. Sahu, and Robert A Crane, authors of Practicing Financial Planning for Professionals[8] do not define what a financial plan is, but merely defer to the Certified Financial Planner Board of Standards' definition of 'financial planning'.

Planning

When drafting a financial plan, the company should establish the planning horizon,[9] which is the time period of the plan, whether it be on a short-term (usually 12 months) or long-term (two to five years) basis. Also, the individual projects and investment proposals of each operational unit within the company should be totaled and treated as one large project. This process is called aggregation.[10]

See also

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