1. $ Managing your Money $ Aka Budgeting
Office of Frank M. Pees, Chapter 13 Trustee Worthington, OH 43085

2. Benefits of Budgeting
Budgeting allows you to see what you earn and what you spend.
-----It is your cash flow in action
Budgeting makes you proactive instead of reactive.
Budgeting creates a non-confrontational way to talk about money.
All successful businesses work from a budget.
Budgeting is the first step in personal financial planning.

3. Basics of Budgeting
Understanding cash flow is the basis of all budgeting.
Cash flow is INCOME vs. EXPENSES:
money coming in vs. money going out
Financial conditions improve when you take better control of your monty.

4. Components of a Budget Earning money Tracking money
Categorizing expenses
Subtracting expenses from income
Analyzing and trimming expenses
Saving money

5. Know Your Monthly Income
Gross income – what you actually earn
Net income – what’s left over after deductions for taxes, insurance, Chapter 13 payment, child support, etc. (what you actually get to spend)

6. Net Monthly Income
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7. Types of Expenses Types of Expenses Examples
Fixed Mortgage, Rent, Chapter Payments, Support
Variable/ Clothing, Food, Gas for Flexible auto, Utilities
Periodic Insurance (house, car) Property/Income Taxes

8. GETTING STARTED
Activity #2
How much do you think you spend?

9. Track your spending
Write down everything you spend every day for one month
Every adult in the household with a paycheck needs to track their spending.

10. Where does your money go?
Tracking leads to actual numbers which will result in a more realistic budget.
Tracking enables you to detect “leaks” and patterns of spending.
Start today – track your expenses for, at least, the next 30 days:
“Small leaks sink great ships.”
-Ben Franklin
7/29/2018

11. Write down every time money is spent, even on the smallest things.

12. Weekly Tracking
Track weekly expenses
Do this for 4 weeks

13. Monthly Totals
Total weekly expenses
to get monthly totals

14. Create a personal spending plan
The first step is to see where you are so you can begin to make plans to get where you want to be.

15. Analyze and Trim Expenses
Fixed Expenses – Harder to change in the short term but analyze to see if they can be reduced in any way. Flexible Expenses – This is where you have the most control and can begin to make adjustments. Reduce expenses where possible. Some flexible expenses can become more predictable such as using the budget plan with utility companies.

16. Analyze and Trim Expenses
Periodic Expenses – Calculate to determine how much should be saved each paycheck to cover these expenses when due.

17. Set Financial Goals Set short-term, mid-range, and long-term goals.
Focus on creating a maintenance fund to cover periodic expenses.
Begin to build an emergency fund for unexpected expenses.
7/29/2018

18. Pitfalls to Successful
Money Management
Unrealistic Goals
Emotional uses of Money
Lack of Planning – Impulse buying
Lack of Follow-through of a Plan
Different Approaches conflict
Lack of Communication
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19. Cost Savings Tips Pack lunch for work or school
Cancel extra cable services
Use the public library for DVDs & magazines
Food banks
Dollar stores, secondhand clothing shops
Use coupons and look for specials
Plan meals weekly or monthly & build menus from what’s on special

20. Savings Tips $25.00 weekly becomes $1,300.00 in 52 weeks.
Save bonus income, overtime pay, extra paychecks in the 3 paycheck months.
Save loose change and every $5.00 or $10.00 bill.
Have a “NOTHING” week when you do not spend any extra money, just buy essentials.
Read The Millionaire Next Door by Thomas J. Stanley, William D. Danko.

21. Saving Your Money
As soon as you receive your payment termination letter at the end of your case, start saving 5% - 10% of each & every paycheck from each & every wage-earner.
The habit of savings is more important at the beginning than the amount you save.
Pay yourself first. Use direct deposit if possible.

22. Money can’t buy happiness.
As the country music singer says: Children spell LOVE: T-I-M-E It’s the time we spend with family & friends that matters most.

23. “It’s good to have money and the things that money can buy, but it’s good too, to make sure you haven’t lost the things that money can’t buy.”
George Horace Lorimer
Editor, Saturday Evening Post