1. C ALIFORNIA A GRICULTURE E DUCATION R ECORD B OOK Budget

3. B UDGET A chance to map out what costs might be involved in your project and what might be earned.

4. T ERMS TO K NOW 1. Budget estimated expenses, income, and net income for project 2. By-Product a product other than the main product that can make you money 3. Enterprise Term used for project or SAE. 4. Estimate predicted price 5. Expense cost of something 6. Integral an essential part of something 7. Interest money charged for borrowing money

5. T ERMS TO K NOW 7. Income money received 8. Itemize to list individually 9. Net Income income-expenses (what you keep) 10. Principal original amount of $ borrowed without the interest 11. Production Cycle completed round of events relating to the project 12. Rent money paid for using someone’s resources

6. P URPOSE OF THE B UDGET A. To anticipate costs, compare to income, and make sure you will make money. B. Needs to be done BEFORE project starts A. May help you in the decision making process of moving forward with a project. C. Needed to receive bank loan or to borrow money.

7. E XPENSES VS. I NCOME Cost of Animal(s) Feed Medications Work Clothes Fair Entries Interest Paid on a Loan Rent Utilities Materials Tools & Equipment Sale of Animal or Project Paycheck Fair Premiums Income – comes INExpenses – EXit or go OUT Can you think of any more?

8. W HAT DOES NOT GO INTO THE BUDGET ? Purchase of LARGE equipment – things that last over one year. Gasoline to get to and from work – only gas used at work. Purchase of breeding stock and animals.

9. H OW TO C OMPLETE THE B UDGET 1. Determine the projects and label the columns. 2. Descriptions should be SPECIFIC. 1. Explain how you got the number or cost. 2. Number of lambs, plants, feed sacks, etc. 3. Make sure the entries are under the appropriate enterprise. 4. Round money to the nearest dollar 1. No cents, just whole numbers 5. Do not enter zeroes…leave it blank 6. Do not use dollar signs 7. Use a PENCIL 8. Estimate expenses higher and income lower 9. Total your expenses and income and determine if you will make money or lose money. 10. DO NOT change the budget throughout the year

10. Y OUR T URN ! Using the sample scenario on your notes, complete the sample budget.

11. P RACTICE BUDGET My livestock broker project will require me to purchase large animals, feed them, and then hopefully sell them for a profit. I will buy 20 head of livestock for $100 each. After feeding them, I will sell them to local individuals and livestock yards for $200 each. My other expenses associated with this project include: Feed and Supplies -$ 50.00/animal State and Certification Fee -$ 5/animal Equipment Depreciation -$ 2.00/animal Veterinary Costs-Lab Tests -$ 4.00/animal Transportation Costs -$ 2.00/animal

12. Livestock Purchase of animals 20hd @ 100/hd 2000 Feed & Supplies $50/hd 1000 State Cert. Fee $5/hd 100 Equipment Depreciation 40 Vet Bills $4/hd80 Transport Cost $2/hd 40 3260

13. Sale of Animals ($200/hd * 20hd) 4000 740

14. T O DO OR NOT TO DO THIS PROJECT … What do you think? Is it worth the $740? Why or why not?

15. Y OUR B UDGET Complete the bottom portion of your notes. Name your project. List your potential expenses and the costs. List your potential income and the costs. Complete your budget in your record book for your projects.

16. $10,000 P YRAMID A CTIVITY