Managing your Money Chapter 20 8/8/2019
Objectives Identify the steps involved in planning a budget Explain how to keep records effectively Describe strategies for staying within your budget Identify personal changes that might affect your finances Discuss ways to adjust to economic change List several sources of help for financial problems. 8/8/2019
Budget Plan for saving & spending money based on your income & expenses Well-planned budgets can give you a feeling of confidence that you’ll be able to handle everyday needs as well as achieve dreams for your future lifestyle 8/8/2019
Planning your budget Three important questions What are your lifestyle goals? What’s really important to you? What do you have, and what do you need? Defining goals – Short & Long-term Making choices Estimating income (net pay) & expenses (both fixed & flexible) 1d. You’ll use your answers to develop a budget plan. 2. Make a list of things you need to buy now and in the future 3. you’ll probably have more items on the list they you have money for. Prioritize what is most important for you…distinguish between needs & wants 8/8/2019
Preparing and Following your Budget Be realistic Keeping effective records Recommendations Keep files where you can get to them easily File bills & records Keep a calendar to record when bills are due & when they were paid Buy a fireproof box or rent a safe-deposit box for important documents (insurance papers, birth certificates, car titles, etc.) 8/8/2019
Fine-tuning your budget Getting started (fig. 20.2) Categories Income Fixed expenses Flexible expenses Savings Look at budgeted vs. actual spending Fine-tuning your budget If budget does not balance…either cut spending or increase income 8/8/2019
Financial responsibility As you move toward adulthood, your financial responsibility increases 8/8/2019
Adjusting to economic change Inflation Budget may need to be refigured because things get more expensive Coping w/inflation Cut back on unnecessary expenses Look for a 2nd job to increase income Shop smart! Look for sales and buy in bulk First…it’s not just personal events that can change your financial outlook. Events throughout the nation & world also can affect your finances. 8/8/2019
Recession Save as much money as possible Accept job placement help if laid off Talk to a loan officer at a bank to see if you can refinance any debt to lower payments 8/8/2019