1. Financial Responsibility and Money Management: Personal Budgeting
Big Ideas
Responsible personal finance decisions are based upon reliable information and used to reach personal goals
A personal financial plan includes financial goals and a budget.
A Budget includes ……?
spending on goods and services, savings and investments, insurance and philanthropy

2. Overview Information
A personal financial plan is designed to enable an individual to reach a goal
What are some goals you may want to save for?
Steps to buy new phone or a car
How to save to pay for college

3. Financial plans are used for both short range and long range goals
Short-range: goals obtained within a year…Ex’s?....
Purchasing clothes, tickets, electronics
Taking a vacation
Long-range: goals that take a significant amount of time
Renting apartment , buying car
Saving for college/retirement

4. Personal financial plan = budget that estimates the income and expenses over a specific period of time
Manages spending
Help achieve financial goals
Usually focus on long-range goals

5. Budget Categories Daily, Weekly, Monthly Spending: Ex’s….?
Fixed vs. Variable Expenses….Ex’s? …..

6. Budget Categories Investments – maximize savings but involve risks
Stocks, securities, mutual funds
Can be fixed or variable
Insurance – protects personal financial plan
Life, health, auto, home
Pay small amounts to possibly receive a large amount later
Usually Fixed but can VARY and can be PERIODIC

7. Budget Categories Philanthropic giving – making donations
Throughout life or after death
Money given to charities/foundations/scholarship funds
Retirement and Estate planning – long term goal
How wealth accumulates over time for use after work/after death

8. Pay Check Deductions
Federal Income Tax 720
State Income Tax 220
City Income Tax 140
Medicare 50
STRS 700
Health
Dental 6
Vision 1
Union 15
403 B 200
Savings

9. Fixed Costs
Life Ins
College Savings 200
Car Ins 70
Car = 530
Home Security 90
Mortgage 600
Home Ins / Tax 350
Home Equity Loan 100
Furniture Loan 90
Savings
TOTAL $2140

10. Variable Costs
Natural Gas 80
Electric
Water Sewer 75 / month (every 3
Phone (home/cell) 150
TV/Internet 80
Gasoline 80
Babysitter 100
Church/Charity 70
TOTAL
Fixed + Variable = Deductions = 5167

11. Methods of budgeting Personal financial worksheet
May be for annual, monthly, or weekly
Tracks income vs. expenditures
Checkbook balancing
Provides a ledger for writing down income vs. expenditures for a particular bank account
Write down cash withdrawals made, debit card use, checks written

12. Has been largely replaced by online banking and online bank statements
Bank customers can now view their income vs. expenditures almost immediately after making a transaction (if using debit card)
Checks don’t “post” to account until they have been deposited by the receiver

13. Requires awareness of personal income vs. expenditures
Necessitates financial responsibility
Allows individual to see “trouble areas”

14. A Budget: So Simple, But So Hard
Why?
Bravery/Courage……(Huh!?!??)
Discipline