Budgeting and Record Keeping. Financial Planning ► Financial Plan- An _____ program for spending, saving, and investing the money you earn.

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Presentation transcript:

Budgeting and Record Keeping

Financial Planning ► Financial Plan- An _____ program for spending, saving, and investing the money you earn

Financial Planning (cont.) Financial Planning Steps: 1. Determine and ______ your options for using your money 2. Make sure you use your limited funds for the things you want most 3. Prevent ________ and _______ spending 4. _________ your financial resources (sources of income) so you can maintain a plan of personal financial fitness 5. Avoid money worries by planning

Preparing a Budget ► Budgeting is the first step to financial __________ ► Budget- A ________ and _______ plan based on your expected income and expenses

Preparing a Budget Budget Planning Steps: 1. Estimate _____ expected income for a certain time period (bi-weekly or monthly). Include all money you expect to receive. 2. Decide how much of your income you want to save – to set aside for future needs 3. Estimate your expenses, or money you will need for day-to-day purchases 4. _______ your budget

A Typical Monthly Budget ► __________ Income- The money you have left to spend or save after taxes have been paid ► ______ Expenses- Costs you are obligated to pay at specific times ► ________ Expenses- Costs that vary in amount and type, depending on events and the choices you make

Filing Systems for Budgets ► Home _____ system ► Database ► Software Program

HOME FILING SYSTEM

Net Worth ► ______- A list of items of value that a person owns ► Liabilities- Debt; Amounts of money owed to others ► ___ _____- The difference between your assets and liabilities ► ______- When your assets are greater than your liabilities ► Insolvent- When your liabilities are greater than your assets