Introduction to Budgeting

ICE BREAKER! What is your earliest money memory? These early experiences can shape your money behaviors as an adult.

Show of hands! How many have created a budget in the past?

Show of hands! How many of you have STUCK to your budget?

The Importance of a Budget: Looking to Your Future Nearly 70% of consumers live paycheck to paycheck 68% of Americans could not cover a $5,000 emergency without having to go into debt for it 55% of Americans “always” or “sometimes” worry about their money Nearly 30% of Americans spent more time watching reality TV last month than they spent planning and preparing for retirement over the past 10 years Habits you form now will affect the rest of your life

As You Begin the Budget Journey Take responsibility for your money: Spend money wisely You are accountable for your choices Get help Behavior matters—become mindful: Practice financial self-awareness Observe thoughts, feelings, and behavior Watch yourself and others and be honest Beware the 24-hour marketplace

Budgeting Rewards Ability to maintain or improve your standard of living Controlled spending allows you to live well today and tomorrow Accumulate wealth—Remember, whatever your income, you can spend it or save it Hope of avoiding much of the havoc that money problems wreak on your personal life—Conflict over money is the leading cause of divorce

What is Your Biggest Obstacle to Sticking to a Budget? Little things adding up Impulse purchases (coffee, clothes) Not knowing how to start a budget Having trouble creating a budget that adequately reflects all of my expenses, debts, etc. Monitoring spending/tracking expenditures Unexpected expenses—friends want to eat out, etc. Not having a clear food budget Feeling overconfident in my current spending habits Not actually taking the time to make one Problem being able to say “no” to things that don’t fit my budget

Budgeting 101 1 2 3 4 Develop a plan Keep it simple & realistic! Make a list of all sources of income Make a list of all anticipated expenses 3 Identify shortfalls Do you have a Plan B for emergencies? 4 Implement plan! Revisit and revise quarterly

Based on recent survey results: Expense Average Spent Per Month Rent (with avg. of 1-2 roommates) $1,000 Utilities $125 Laundry/Dry Cleaning $16 Groceries/Eating Out $342 Clothing $40 Toiletries/Personal Care $33 Monthly Credit Card $63 Entertainment $60 Other $44 Total $1723

Traditional Budget Plan

Don’t Have Too Much Month Left at the End of Your Money! Clip coupons to save money on groceries Carpool or use public transportation Buy clothes at end-of-season sales Buy generic brands rather than name brands products Buy non-perishable items in bulk Cut out the daily latte or frequent dining out The 30 Minute Rule: If you see something you “have to have,” wait 30 minutes, then if you still can’t live without it—make the purchase.

Entertainment Take advantage of happy hour food specials Use Groupon/LivingSocial/GiltCity for events and entertainment Public Library for movies, museum passes, tourist site tours, and more with membership AMC Loews Common 19 ZipCars- it’s like a rental Seek out free or cheap events online https://www.consumer.gov/articles/1002-making-budget

I’m not the only expert here… Let’s help each other! What tricks do you use to save money?