Do Now: Handout!!! Come and Get it!! Budget Analysis Aim: What strategies can you implement if your expenses are higher than your income? Do Now: Handout!!! Come and Get it!!

Write down 6 things you have spent money on this past week Write down 6 things you have spent money on this past week. Put an N for need or a W for want next to each item!

Living within your means What is the difference between needs and wants? Needs: things you must have Wants: things you would like to have

Opportunity CO$T Is the cost related to the next-best choice available to someone who has picked between several mutually exclusive choices. Trade Off Examples: The opportunity cost of going to college is the money you would have earned if you worked instead. On the one hand, you lose four years of salary while getting your degree; on the other hand, you hope to earn more during your career, thanks to your education, to offset the lost wages. If a gardener decides to grow carrots, his or her opportunity cost is the alternative crop that might have been grown instead (potatoes, tomatoes, pumpkins, etc.).

What happens if your expenses are higher than your income? Decrease your spending: usually means you’ll have to reduce your flexible expenses: An expense that can be adjusted or eliminated, such as luxury items like designer clothes Pay Cash Only- no credit cards or loans: Keep all receipts or record all cash purchases on a small notepad Reduce impulse buying: spur of the moment spending

What happens if your expenses are higher than your income? Increase income: look for a new job or an additional job; ask for a raise Decrease variable expenses Before making purchases, consider companion expenses: Hidden costs that accompany a purchases Carry a limited amount of cash Shop smart: Discount/Coupons