Budgeting

Budget Buster Activity Give yourself five points if you have a budget. Give yourself five points if you have a checkbook. Deduct a point if you have ever bounced a check. Deduct a point if you bought something this week without comparison shopping. Give yourself a point if you bought a store brand, rather than a name brand item this week. Give yourself five points if you have a savings account. Give yourself five points if you added any money to your savings account this week. Give yourself five points if you pay your own car insurance (or part of it). Deduct five points if you routinely carry more than $10.00 in your purse or wallet. Give yourself five points if you have a method of recording what you spend.

Why is it important to have a budget? With your table, come up with three reasons why it is important to have a budget. One person at the table should write down the groups three reasons. This will be turned in – Ensure all group members names are on the paper Be prepared to discuss as a class

***You will have a test on this vocabulary on Tuesday, January 12th*** Budget Vocabulary ***You will have a test on this vocabulary on Tuesday, January 12th*** Budget: A plan for managing income and expenses. Income: Any money you receive. Trade Offs: An exchange of one thing in return for another. Envelope systems: Label envelopes with each of your expense categories. When you get money, distribute it among the envelopes based on the expense amounts in your budget. Paper Tracking: Using a checking account register to track all your income and expenses.

Budget Vocabulary Cont. ***You will have a test on this vocabulary on Tuesday, January 12th*** Expense: An amount of money spent to buy something or do something. Fixed Expenses: Expenses which usually do not vary in amount and must be paid on a regular basis (mortgage, car payments, etc). Flexible Expenses: Expenses which vary from week to week or month to month (clothing, food, etc.). Gross Income: The total amount of income earned before deductions are made. Net Income: Amount of income left after deductions are taken.

***You will have a test on this vocabulary on Tuesday, January 12th*** Budget Vocabulary ***You will have a test on this vocabulary on Tuesday, January 12th*** Needs: Goods or services that are required for survival  Opportunity cost: The value of the next best alternative  that must be forgone as a result of a decision Value:  A fundamental belief or practice about what is  desirable, worthwhile, and important to an  individual Want:  The desire for goods and services that can  increase our quality of life but are not absolutely  necessary for our survival  

What are your goals? List some of your educational, social, financial, family, health/physical, and recreational goals. You must list 6 for each category Educational Financial Family/Social Health/Physical Recreational

Working with your goals: What are some of your goals? Are these goals: Short-term goals (1–4 weeks) Medium-term goals (2–12 months) Long-term goals (1 year or longer)

Prioritize your goals: List and prioritize six of your most important goals. After each goal: identify what you could be doing now to work toward the goal what resources (if any) you need to achieve each goal. Resources: Personal - abilities, skills, time, education, etc. External - money, car, tools, etc.

Budgeting

Budgeting A budget is a plan for managing income and expenses. It does not require complicated math, nor does it force you to become a penny pincher

Budgeting Benefits of Budgeting: It helps you see where your money is spent Budgets serve as a record of where your money came from and where it was spent Budgets can be a great help to you when computing your taxes. Budgeting strengthens family communication. Budgeting increases sharing, both in setting a plan and evaluating spending patterns It is beneficial for financial matters may be a real source of conflict and divorce in a marriage.

Budgeting A budget has two main components: Income and expenses. Income is money earned. It can come from wages or salaries, tips, withdrawal of money from saving, interest earned on savings accounts, scholarships, monetary gifts, etc.

Budgeting An expense is money spent. The two main types of expenses are fixed and variable Fixed expenses are those which have to be paid by a certain date. These expenses are often contractual and little can be done to change the expense in a short period of time. Flexible expenses can easily be reduced or eliminated and are often not due by a certain date.

Where to Spend Your Money: Experts recommend that people budget their money as follows: Food 15-20% Housing 25-35 % Transportation 10% Clothing 10% Savings 10% Miscellaneous 15-20%

Steps to Making a Budget: Evaluate your present and future goals. What do you need and want now, in the next year, or the next ten years? ‘ If you are married, you may find that your priorities differ from those of your spouse. You may have to make some compromises. Determine your monthly net income or take home pay. Gross income is your salary before Federal Taxes, State Taxes, Social Security, and Medicare are deducted.

Steps to Making a Budget: Decide how to handle your money. There are several methods: A. CHECK REGISTER SYSTEM: A person tracks all expenditures in a checkbook register which has been divided into spending plan categories. B. ENVELOPE SYSTEM: Individuals place the actual budgeted amount of cash from a paycheck into the specific envelope labeled for the expense. C. COMPUTER PROGRAM: A computer software program designed to tracking you income and expenses

Steps to Making a Budget: Determine your expenses. If your expenses are greater than your income, you may need to make some adjustments in your priorities. Use your budget! Once you have balanced you budget on paper, you can use the figures as guidelines for your spending. Budgeting is an ongoing process that must be revised and updated often.