Budget Basics Money Management Chapter Eight Notes.

Slides:



Advertisements
Similar presentations
Budgeting.
Advertisements

Budgeting II. What is a Budget? A plan for spending and saving money Most people think budgets are: –Rigid and inflexible –Painful – who wants to eat.
Budget Basics.
Budgets – Don’t Go Broke Spending Your Money Earning Power Earning power is the ability to earn money in exchange for work. How much you earn depends.
Budgeting.
Budget Basics.
Budgeting What is a budget? What are characteristics of a budget? Why do you need to budget?
Unit 6.3 Part 1 Budget Categories. What is a Budget? A plan for spending and saving money Most people think budgets are: –Rigid and inflexible –Painful.
Budg eting Introduction to Business & Technology.
Budgeting. What is a Budget? A plan for spending and saving money Most people think budgets are: –Rigid and inflexible –Painful – who wants to eat Top.
Pay attention like your life depends on this information.
Chapter  A plan for saving and spending.  Allows you to meet your personal goals with a system of wise spending.
Unit 6.3 Part 1 Budgeting. Purpose Learn how to manage money by preparing a personal spending plan Identify ways to decrease spending and increase income.
I CAN DETERMINE AND EXPLAIN THE IMPORTANCE OF CREATING A BUDGET AND HOW IT SUPPORTS GOOD FINANCIAL DECISION MAKING.
What is a Budget? Welcome to class! Put phones away, take out your notes and answer this question: –WHAT IS A BUDGET? In answering this question, did you.
BUDGETING TECHNIQUES & Terms Exploring Business & Marketing.
BUDGETING FOR MAJOR EXPENSES Adapted in partnership with ©2015 Educurious Partners--All rights reserved UNIT 3 LESSON 2 1.
Budgeting: How will you use your money? CLP Chapter 6.
BUDGETING 101 STUDENT CAREER DEVELOPMENT BUSINESS ADMINISTRATION 036 (740)
Introduction to Business & Technology
“I’ve got a great job and no bills. I still live at home
Creating a Personal Budget
What are the benefits of having a budget?
MONEY MANAGEMENT CHAPTER EIGHT NOTES BUDGETING BASICS
Spending Plans Advanced Level.
Clue In: Budgeting Basics Curriculum Kit
Spending Plans Advanced Level.
“Take Charge of Your Finances” Advanced Level
BUDGETING & Managing Your money
Budgeting and Financial Priorities
Spending Plans Advanced Level.
Budgeting.
Spending Plans Advanced Level.
Budgeting.
Practical Money Skills for Life
Spending and Savings Most people cannot obtain all of their wants. Instead, they have to make choices. Making a personal budget helps people understand.
Budgeting.
Spending Plans Advanced Level.
Spending Plans Advanced Level.
January 14, 2013 Make a list of all the money you spent last month.
Spending Plans Advanced Level.
How to budget your money?
UNIT 3 – Test Review Budgeting and Managing a Checking Account
Tuesday April 21, 2015 Review from Yesterday Budgeting Notes
Budgeting.
Spending Plans Advanced Level.
Spending Plans Advanced Level.
Spending Plans Brown Family Lesson.
Warm Up On a separate sheet of paper, what are some things that you have bought recently? Are these things needed or wanted? What kind of things do your.
Spending Plans Advanced Level.
Budgeting Essential Questions
Spending Plans Advanced Level.
More Budget Practice Financial Literacy.
Spending Plans Advanced Level.
Budgeting.
Spending Plans Advanced Level.
Spending Plans Advanced Level.
Spending Plans Advanced Level.
Budgeting.
“Take Charge of Your Finances” Advanced Level
Budgeting.
Budgeting Essential Questions
Planning a Budget Chapter 28 5/30/2019.
Spending Plans Advanced Level.
Spending Plans Advanced Level.
Budgeting.
Budgeting In 12 (not so) Easy Steps.
Aim: How do you create a budget?
Presentation transcript:

Budget Basics Money Management Chapter Eight Notes

What is a Budget? A plan for spending and saving money “A budget takes the fun out of money” Mason Cooley

Budgeting: A Perspective “Budgeting has a bad rap. Too many people who give budget advice are detail people and/or control freaks. They make you think that if you don’t record every taco and pair of pantyhose, you’re on the road to financial ruin. You don’t have to track every penny to have an effective financial plan. The secret is setting priorities. Pay yourself first, then pay your bills, then you can blow what’s left with a clear conscience” Ann Coleman

Why Do Budgets Get a Bad Rap? Does the mere mention of the word “budget” conjure up images of drudgery and deprivation? You’re not alone. Most people think budgets are Rigid and inflexible Painful – who wants to eat Top Ramen every night? No fun!

Why Budgets Really Do Make Sense A good budget should help you set priorities and achieve what’s important to you. Not what’s important to your banker, your best friend, or your relatives. A good budget should be Flexible: It should change as your needs change. Ongoing: It’s not a one-time event. A budget should be part of your everyday life. Clear and easy to use: 12 page spreadsheets are out!

Budgets: Where to Start Be clear on what you make and how much you spend. Anticipate all of your potential expenses.

Budget Categories Income Savings Expenses Gross Net Emergencies Long-Term Retirement Short-Term Expenses Fixed Variable Discretionary

Income: The Amount of Money Earned Gross income: An individual’s income before taxes. Net income: Income after taxes are paid. Fasten your seat belts: Taxes can range from 15% to 31%. Yikes!

The Amazing Disappearing Paycheck Your first real job pays $30,000/year. You’re rolling in the bucks, right? Not necessarily. Your salary is your gross income. Take off at least 25% for taxes and other deductions. That’s what’s left for you to spend. Example: Gross salary = $30,000 Minus 25% taxes and deductions - 7,500 Net income $22,500 Quite a hit, huh?

Savings: Pay Yourself First Savings is unspent income. Types Emergencies: Plan to set aside three months’ living expenses Long-term: Large ticket items (house, car, college) Retirement: It’s never to early to start Short-term: Vacation, clothes, new skis

The Power of Saving Early Save early and regularly. Then watch your money grow! If you start at age 21 with $1,000 and add $50/month until you’re 55, you’ll end up with $120,373! You contributed only $21,400. The remaining $98,793 is interest. You didn’t have to lift a finger for it. Sweet deal! Imagine if you saved even more monthly!

Expenses Expense: A cost to meet a need or pay a debt Types of expenses Fixed Variable Discretionary

Fixed Expenses A cost that occurs regularly and doesn’t vary in amount Rent Mortgage Car payment Insurance premium School loans Others?

Variable Expenses A cost that occurs regularly but may vary in amount Electricity Water and Garbage Telephone Gasoline Groceries Others?

Discretionary Expenses A cost determined by personal wants that may be controlled Movies, videos, CDs Sports Eating out Grooming and clothes Concerts and plays Vacations Others?

Safe Percentages The percentages shown below represent guidelines for safe amounts for major budget items. These are guidelines. You may choose to adjust these, but remember, if you spend 80% of your income on housing, you’ll be eating lots of Top Ramen during the month! 10% Saving 8% Misc. 7% Credit Payments 5% Health 28% Housing 20% Transportation 6% Clothing 16% Food

Budget Basics Summary Establish a budget with the following: Income Savings Expenses Fixed Variable Discretionary End up with a budget surplus and you’re a success! End up with a deficit … back to the drawing board! Set your priorities. What do you want to accomplish with your money?