1. A little now can go a long way
Budgeting
A little now can go a long way

2. The Process
Step 1: Assess your personal and financial situation (needs, values, life situation).
Step 2: Set personal and financial goals.
Step 3: Create a budget for fixed and variable expenses based on projected income.
Step 4: Monitor current spending (saving, investing) patterns.
Step 5: Compare your budget to what you have actually spent.
Step 6: Review financial progress and revise budgeted amounts.

3. The Situation (Step 1) What do you have? Income Assets Savings
Wage Income, Schedule C income
Other Income: rent, investments, retirement fund(s)
Assets
Home (is this really an asset?)
Rental Property, other Real Estate
Savings
Collections: art, antiques, bottle caps
Investment Portfolio (long term savings, retirement)
Vehicles: Auto, Boat, Motorcycle,

4. The Situation (Step 1) What do you owe? Mortgage/Rent Car Payment(s)
Credit Card Debt
Other Debt
Tuition/School Loans
Boat Loan
Home Equity Loan

5. Cash flow  What is your burn rate?
The Situation (Step 1)
Cash flow  What is your burn rate?
Above water
Treading water
Sinking

6. Set Goals (Step 2) Well-written personal and financial goals SHOULD:
Be realistic
A student working part-time is not likely to be able to afford a new car every few years.
Be stated in specifics
“I plan/want to save $5,000 for a down payment to buy a house.”
Have a time frame
“I plan/want to pay off my credit card within the next 18 months.”
State the action to be taken
“I plan/want to start an automatic deposit savings account with monthly withdrawals from my checking account.”

7. Create a Budget (Step 3)
Pop Quiz

8. A few useful pieces of information:
Create a Budget (Step 3)
A few useful pieces of information:
Get a baseline of what the job you want pays. -
PA State Income Tax = 3.07%
Federal Tax Calculator -
For the sake of this exercise, Taxable Income = Total Income – (Retirement Savings + Health Insurance Premiums + Property Tax + Mortgage Interest Payments)