1. How to budget your money?

2. “Some Money Facts”
$ The average person spends money three to six times a day.
$ A movie with popcorn and a soft drink can easily cost $20
$ Just one soft drink a day for $1.50 adds up to $540 in a year
$ What’s the biggest expense item for teenagers?

3. Money Matters: How many times a day do you spend money?
Money problems stay with you for the rest of your life.
Top reason for divorce is financial. Finances affects everything else in your life.

4. Chapter 7 bankruptcy – no payment necessary
Chapter 13 bankruptcy – set up payment plan to pay back
The filing fee for Chapter 7 bankruptcy is $299 and $274 for Chapter 13.
Without a monthly check most families would last 1 to 2 mos.

5. On average…. 10% owe $10,000 or more in credit card debt
Nearly 94,000 people under 25 file for bankruptcy each year.
A little more than 82,000 Americans, 65 years or older, filed for bankruptcy in 2001—up 244 percent in a decade.
1.5 million Americans will file bankruptcy this year.
Average in the US is 1 in 34 file for bankruptcy
Bankruptcies due to medical bills increased by nearly 50 percent in a six-year period, from 46 percent in 2001 to 62 percent in 2007, and most of those who filed for bankruptcy were middle-class, well-educated homeowners
Rise in year olds moving back in with parents
College students have $3,000 in credit card debt
10% owe $10,000 or more in credit card debt

6. 87% of retires are retiring with $10,000 or less
Wealth is not what you spend but your net worth or accumulative wealth, what you have.
80% of millionaires have accumulated slow and steady
What is the portrait of a millionaire?
Live in same city/town for over 20 years
Live below their means
Married 1 time and still married
Usually owns a chain of stores or similar
At age 20 if you save $ a month at 10% interest you will be a millionaire by the age of 55.

7. Ways to improve your finances
Make more money
Cut your expenses
“Wait and win the lottery” system
Have a budget

8. Discussion:
What is a Budget?
Why do you have a budget?

9. Budgeting Terms Budgeting Gross income Net income Fixed expenses
Flexible expenses

10. Budget: A plan for managing income and expenses Gross Income : the total amount of income earned before deductions are made.
Net Income : amount of income left after deductions are taken. (25-35% less than gross)

11. Budgeting Terms
Fixed Expenses: Expenses which usually do not vary in amount and must be paid on a regular basis (mortgage, car payments, loans, insurance.)
Flexible Expenses – Expenses which vary from week to week or month to month (clothing, food, etc.)

12. What is included in a budget for a family in a given month?
The typical family spend their money how?
Housing: 25%-35%
Transportation: 2%-5%
Food : 10%-15%
Utilities: 2%-10% of monthly rent
Insurance: 2%-5%
Emergency: 10%
Pocket $: 1%-2%
Debt obligations: 5%-15%

13. Steps to Budgeting 1. Keep track of spending for 1-2 months
2. Determine Net and Gross income (net is 25%-35% less than gross)
3. Set financial goals
4. Figure fixed expense and flexible expenses
5. Determine emergency expenses (10%)
6. Total expenses (expenses=income)