Learning How to Save Money Chapter 4 Budgeting Learning How to Save Money

How much Money do You Need to Live ?? Weekly? 300, 700, 600 Monthly? 3,000, 5,000 Annually? 15,000, 40,000 , 50, 000

How do People Spend Money?? Get with a partner/group Brain storm a list of all monthly expenses one would have to pay Share your list with another group, discuss/add additional expenses Create a unified list for class

Monthly Expense List Fixed Expenses Cost Utilities Other Totals 1010 Rent/Morgage 500 Water/Sewag/Garb 100 Cell Phone 60 Car 250 Electric 75 Grocery 120 Insurance Heating 50 Car/home repair Home Insurance 80 Phone/Tv/ Internet Entertainment 150 School Loan Savings Totals 1010 345 430

After some consideration, how much Money do You Need to Live ?? Weekly? Monthly? Annually?

4-1 Average Monthly Expenses A budget, or plan to balance income and expenses can help plan and meet expenses. To prepare a budget a record of expenditures, amounts of money paid out, over time. In order to decide how and where spending should occur, average monthly expenses must be determined.

Find the Average Monthly Expenditures Average Monthly Income = Sum monthly expenses # of months January February March Average Expense Housing $251 $300 $178 Food $98 $215 $164 Transportation $345 $230 $245 Total

Assignment Time!!! Worksheet 4-1 Practice

4-2 Fixed and Variable Expenses Expenses that remain the same from month to month are Fixed Expenses. Mortgage/Rent Car Insurances Expenses that change from month to month are Variable Expenses. Recreation Clothing Groceries

Keeping track of Expenditures can help summarize expenditures Budget Sheet for: Benjamin Button Total Monthly Expenses Monthly Variable Expenses Monthly Fixed Expenses Groceries Mortgage/Rent Clothes Car Medicines Home Insurance Dinner Life Insurance Video rental/entertainment Auto Insurance Home Repair Taxes Car Repair ***Savings Total

Understanding Payments If auto insurance is paid quarterly in the amount of $250, how much should be budgeted per month? How much money is spent on Auto insurance for annually.

Assignment Time!!! Worksheet 4-2 Practice

4-3 Making a Budget Once you have listed your expenditures on a budget sheet, you are ready to make a budget. A budget will help you decided if you can afford optional purchases. It will help you to plan for vacations and major expenses such as automobiles, new appliances, ect. It can also aid in decided how to adjust your spending to save or just to have money.

How to Make a Budget?? 1- Determine the percentages of expenditures based on the net monthly income Net Monthly Income – the amount earned (take home) in average month 2- Calculate the number of degrees (round to the nearest degree) Degrees will be measured and displayed on circle graph (360 degrees make up a circle)

Finding Percent of Budget Items ** Bases on a net monthly income of $ 1,053 Item Average Expense Percent of Income Housing $250 250 / 1,053 x 100 = Food $159 159 / 1,053 x 100 = Transportation $180 180 / 1,053 x 100 = Savings $50 50 / 1,053 x 100 = Finding Percent of Budget Items Percent of Budget item = Budget item / net monthly income x 100

Finding Degrees of Budget Items Step 1: Find the Degrees Item Percent of Income Degree in Circle Budget Item Degrees Housing 24% 360 Food 15% Transportation 17% Savings 5% Finding Degrees of Budget Items Pr. 4-3 Degrees of Budget item = Percent of Item x Degrees in Circle ( 360)

Step 2: Draw circle and make angles at budget item degrees

Working with a Protractor and Compass to make Budget 1. Line up center with center of Circle 2. Draw line from center to circle 3. Line up on line and select proper scale 4. Find correct angle and draw ray 4. Label section of circle Worksheet on drawing/measuring angles

Assignment Time!!! 4-3 Practice