Budgeting and Money Management

Topics of Discussion Financial Goals Establishing a Budget Saving Spending Money Management Tips

Financial Goals

Short-term goals are achieved in under one year. Mid-term goals are achieved in one to five years. Long-term goals are achieved in more than five years. Information provided by balancepro.net

Financial Goals Define your goals—What do you want? Set an amount—How much money do you need? Set a target date—When do you need to meet your goal? Develop a plan—Establish a budget that includes your financial goals. Information provided by smartaboutmoney.org

Budget A plan to manage your money for a specified period of time.

Budget Budgeting Components: Income Expenses: Fixed Variable Periodic

Budgeting Outline Step 1: Determine Income Salary, Alimony, Child support, Dividends... Step 2: Determine Expenses List and categorize each expense (fixed, variable, periodic) Step 3: Analyze Budget Compare Income and Expenses Step 4: Keep Track of your Budget Review your finances on a monthly basis and make changes when necessary.

Sample Budget Income Paycheck$ Total Income$ Fixed Expenses Mortgage/Rent$ Savings Account$ Auto Loan$ Student Loan$50.00 Variable Expenses Utilities$ Food$ Periodic Expenses Car Insurance50.00 Total Expenses$

Budgeting Guidelines

Budget The concept of keeping a budget can be complicated, but it doesn’t have to be!

Budgeting Do’s Think of your budget as an ongoing planning device—a way to reach your financial goals. Prioritize your financial goals. Limit budget projections to a couple of months ahead until you get the hang of it.

Budgeting Don’ts Don’t think of your budget as inflexible. Don’t get frustrated if you at first don’t reach your targeted budget. Be prepared to modify. Don’t give up! With confidence you can make a budget that works best for you!

Saving

Pay Yourself First YOU ARE THE MOST IMPORTANT EXPENSE! Each time you are paid, set aside a portion of your check to go into a savings account. This ensures you are able to pay for things that are important to you and establishes an emergency fund.

How Much Is A Enough? Set aside at least 10-15% of your paycheck. If you can’t set aside 10-15%, set aside as much as you can. Think of saving your money as a bill you have to pay each month.

How Can I Save? Financial Institution: Your financial institution can automatically transfer a specified amount from your checking account to your savings account every pay period. Employer: If your employer offers Payroll Deduction, specify an amount from your check to be deposited to your savings account.

Spending

Did You Know? The average person spends money 3 times a day. Putting aside every coin you touch usually results in saving about $50 a month. A $5 sandwich usually has less than $1 worth of ingredients.

What If… You purchased a soda every day for 1 year? You went out to eat 3 times a week for 1 year?

Results If a soda costs $.75, you would spend $ (365 days per year x $.75 = $273.75) If it costs $8.00 each time you eat out, you would spend $1,248.00! (3 days x $8.00 = $24.00/week) (52 weeks x $24.00 = $1,248.00)

Fritter Finder

Money Management Tips

Get a realistic view of your spending. For one week, write down everything you spend. Identify areas you can cut back. Emphasize your needs rather than your wants. Information provided by smartaboutmoney.org

Money Management Tips Limit your money access. Avoid areas where you are most tempted to spend money. Don’t use your card at ATMs that will charge you a fee (surcharge). Information provided by smartaboutmoney.org

Money Management Tips If available, consider using store lay-away plans, you are required to pay for the entire purchase before you receive it. Always carry a shopping list. Treat yourself in small ways rather than spending a lot of money on big purchases. Information provided by smartaboutmoney.org

Money Management Tips Set financial goals for debts you want to pay off. Be specific and assign a date by which to achieve these goals. Always pay your bills on time. If a bill is going to be late, contact the creditor immediately. Build an emergency fund equal to at least 3 months' salary. Information provided by smartaboutmoney.org

Steps to a Bright Financial Future 1.Organize your financial documents. 2.Track your spending. 3.Be a selective shopper. 4.Evaluate your debt.

Steps to a Bright Financial Future 5.Reduce your debt. 6.Build a strong credit report. 7.Save for your future.

Steps to a Bright Financial Future 8.Set financial goals. 9.Create a budget. 10.Invest money to achieve your goals.

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