1. Chapter 24: Budgeting, Saving, and Investing Money
24.1 Budgeting Money

2. 24-1 Objectives
Identify your own personal income and spending patterns
Name and describe the four steps involved in developing and using a budget.

3. Budgeting Money Income And Spending Pattern
Developing And Using A Budget
A good first step in learn to manage money is to find out where your money is coming from and where it is going. You will do this by maintaining a record of income and expenditure
The income is money coming in
The expenditure is money that is spent
A budget is a plan for managing income a expenditure.
There are 4 steps involved in developing a budget are as follows:
Establishing goals
Estimating income and expenditures
Setting up the budget
Following and revising the budget

4. Budgeting Money Establishing Goal Estimating Income and Expenditure
Goals should be set before you wok out the details of your budget.
Goals should be kept realistic in relation to present and expected future income
List all goals according to the TIME PERIOD. Be mindful that there are short-range, medium-range, and long-range goals
Naturally, goals change along with situations. For example:
if you are single and live at home, your goals are probably different from what they will be when you leave home.
if you are marry, your goals will change again, as they will if you have children.
Once you have decided on goals, estimate your income and expenditures. A budget may cover any convenient budget period.
Most people like to plan a budget around how often they get paid, such as weekly, bimonthly, or monthly.
If the budget is for a family, records of income and expenditures should be kept over a three- to six-month period.
If you are satisfied with how you have saved your money, allow similar amount in your budget estimates.

5. Budgeting Money Setting Up The Budget Regular Expenditures
Now that you have established your financial goals and have estimated income and expenditures, you are to set up your spending plans
The first part of the budget is for savings.
Savings is cash set aside in a bank account to be used for financial emergencies and goals. It is important to set aside this money as soon as you are paid.
You should save a regular amount of income for use in an emergency.
Once you have reached your figure to set aside for emergencies, start shifting money to saving goals and investments
The next two part of the budget include regular and variable expenditures
Regular expenditures, sometimes called fixed expenditures, are essential monthly payment that are usually the are same amount each month, such as rent and car payment
Here is a list of common regular expenditures:
Rent or mortgage payment
Utilities
Insurance
Auto payment
Credit or loan payments

6. Budgeting Money Variable Expenditure Following and Revising the Budget
Variable expenditures are day-to-day living expenses that may change depending on the time of year, spending habit, and so on.
Food and beverage
Clothing
Transportation
Household
Medical care
Entertainment
Gifts and contributions
Taxes
Following a budget involves the allocation of income to the various items in the budget. It also involves keeping accurate records of expenditures.
The allocation is the distribution of income to various items in a budget.
A line item is a single entry, or budget items.

7. Checkpoint Why should you keep a record of income and expenditure?
What four step are involved in developing a budget?
Name two situation might cause goals to change?
Why is it important to situation to set aside money for saving as soon as you are paid
Explain how to allocate income to budgeted items.
Name two reasons why actual expenditures might be quite different from budget esimates