SECTION 3-2 Preparing a Budget Sheet pp. 149-152

Key Words to Know living expenses (p. 149) Routine expenses, such as food, utilities, and clothing, that vary from month to month. fixed expenses (p. 149) Regular expenses that do not vary from month to month, such as rent and car payment.

Key Words to Know annual expenses (p. 149) Expenses which occur once a year, such as insurance premiums and real estate taxes.

Formula Total Monthly Monthly Monthly Share Monthly = Living + Fixed + of Annual Expenses Expenses Expenses Expenses

Example 1 The Millers use records of their past expenditures to complete the budget sheet shown on page 150 in your textbook. What is the total of their monthly expenses?

Budget Sheet – Outlines your total monthly expenses. Living expenses- Vary from month to month Food Utility bills Entertainment Transportation personal spending Fixed expenses (don’t vary) Rent/mortgage Car payment Savings* Annual expenses (most are paid in monthly installment Car registration Insurance Taxes

Example 1 Answer Step: Find the total monthly expenses. Monthly Monthly Monthly Share Living + Fixed + of Annual Expenses Expenses Expenses $505.00 + $978.50 + $219.29 = $1,702.79

Example 2 The Browns have monthly living expenses of $875.00, monthly fixed expenses of $1,025.80, and annual expenses of $4,974.00. After calculating the Browns’ monthly share of annual expenses, find their total monthly expenses.

Example 2 Answer: Step 1 Find the monthly share of annual expenses.            12 $4,974 = $414.50     12

Example 2 Answer: Step 2 Add up the expenses. Monthly      Monthly         Monthly Share Living    +    Fixed       +    of Annual Expenses    Expenses       Expenses $875.00 + $1,025.80 + $414.50 = $2,315.30

Pg 150-152: 1-18 END OF SECTION 3-2 Preparing a Budget Sheet