1. Managing YOUR Money!
Personal Finance

2. What is a Budget? 1.) Plan for spending and saving
2.) Record of how much money is coming in and going out each month

3. Money IN = 1.) Income - paycheck
2.) Earnings - money from investments or stocks

4. Money OUT = 1.) Expenses – Bills, Loans, Other Needs
2.) Spending – Entertainment, Other Wants

5. Needs vs. Wants A need is something that is essential for survival
A want is something that we desire but it is not necessary for survival

6. *We ultimately control our cash flow even though other factors are involved*
The responsibility lies solely on the one who creates and abides by the budget

7. Expenses that we are exposed to:
Fixed – Expenses that are the same each month
1. Car Payment
2. Rent or House Payment
3. Phone Payment
4. Savings Goal?
5. Student Loan?

8. Expenses that we are exposed to:
Variable – Expenses that can change each month
1.) Gas
2.) Electricity or other Utilities
3.) Food or Groceries

9. *The quicker we are able to develop priority between fixed and variable expenses, the more conservative and accurate our budget will be* *Needs vs. Wants also play a part in a successful Budget*

10. Income
Gross Income – the total amount of money you earn before Taxes Net Income – the total amount of money you have after Taxes

11. Taxes Federal Withholding – Determined by
W-4 form status. Amount is determined by:
1.) Total Income
2.) Marital Status
3.) Dependants Claimed
*Up to 25% deducted combined with Social Security and Medicare Tax*

12. Taxes
Social Security – 6.2% mandated deduction is collected by the government to fund the benefits of retirees and those unable to work.

13. Taxes
Medicare – 1.45% tax deducted from the wages of every legally working employee that is used to pay for the Medicare program provided to individuals over the age of 65

14. FICA Federal Insurance Contributions Act
FICA is combination of Social Security and Medicare Taxes
7.65% deductions = 6.2% Social Security
1.4% Medicare

15. Assignment Read 3 Budgets
On a sheet of paper or on the budget packet, write down the following observations:
1.) Determine which has most successful budget.
2.) Determine which has least successful budget.
3.) How can each one make minor adjustments to ensure a successful budget?

16. Your Budget:
Gross Income = 30,000 yr How to calculate: $30,000/12 months = $2,500 *Must pay 25% in Taxes* $2,500 x (.25) = $625 $2,500 - $625 = $1,875 Net Income

17. Your Budget:
Take % of Expenses out of Net Income: Example: 30% for Rent (Fixed Expense) $1,875 x (.30) = $ *Costs should equal Net Income*