1. Make Your Money Matter: Use a Budget (JAN 2013) Make Your Money Matter: Use a Budget Facilitators Name Date

2. Make Your Money Matter: Use a Budget (JAN 2013) Objectives Discuss factors that influence spending. Define a budget. Explain why a budget is key to financial stability, financial security & acquiring assets. Identify and describe the budgeting process steps. 2

3. Make Your Money Matter: Use a Budget (JAN 2013) Factors Impacting Spending Needs - essential for daily living Wants - nice, but not necessary Values - beliefs, what is worthwhile, desirable, or important to you Goals - what we want to achieve 3

4. Make Your Money Matter: Use a Budget (JAN 2013) Identifying Values 4 What do you value in your life? To identify values, look where you spend your time and money.

5. Make Your Money Matter: Use a Budget (JAN 2013) SMART Goals 5 Time Bound Attainable Realistic Measurable Specific State exactly what will be done State the dollar amount Determine how it can be reached Seta goal that is realistic for your situation and income State when the goal will be reached SMART Goals

6. Make Your Money Matter: Use a Budget (JAN 2013) Goals and Family Family buy-in and cooperation are critical to reaching financial goals. 6

7. Make Your Money Matter: Use a Budget (JAN 2013) What is a Budget? A guide for spending money that is used to record planned and actual spending over a period of time. Plans should be written on paper or electronic. Tell your money where to go instead of wondering where it went. 7

8. Make Your Money Matter: Use a Budget (JAN 2013) Why Develop a Budget? Control spending on family priorities/goals. Provide a ready made excuse for financial decisions. Create long term financial security. Acquire assets. Helps you to live within means/income. Reduces family stress. Reduces need for credit. 8

9. Make Your Money Matter: Use a Budget (JAN 2013) Budget Components & Categories INCOME –Wages/Salary –Alimony –Child Support –Retirement income –Social Security –Public Welfare –Disability income EXPENSES –Savings/Emergency –Food –Housing –Utilities –Transportation –Insurances –Clothing 9

10. Make Your Money Matter: Use a Budget (JAN 2013) Fixed Expenses Fixed: stay the same each month –Rent, house payment, utility bills on budget plans, savings 10

11. Make Your Money Matter: Use a Budget (JAN 2013) Variable Expenses Variable: changes or varies each month –Groceries/food, non-budget plan utility bills 11

12. Make Your Money Matter: Use a Budget (JAN 2013) Periodic Expenses Periodic expenses: expenses come one or more times each year at predictable times. –Auto insurance, property taxes, water bills 12

13. Make Your Money Matter: Use a Budget (JAN 2013) Gross vs. Net Pay 2012 PA Minimum Wage=$7.25 $8.00 x 40 hours per week=$320 week x 4 weeks=$1,280 per month Gross Pay$1,280 -39.39State Tax 3.07% -97.92Social Security (7.65%) -128.00Federal Tax @ 10% Net Pay (Take home)$1014.79 13

14. Make Your Money Matter: Use a Budget (JAN 2013) 14 Budget Worksheet #1

15. Make Your Money Matter: Use a Budget (JAN 2013) Budget Worksheet #2 15

16. Make Your Money Matter: Use a Budget (JAN 2013) How Much to Spend Per Category Fixed ExpensesFlexible Expenses Pay-Yourself-First (10-15%)Food (12-30%) Housing & Utilities (20-45%)Transportation (5-20%) Insurance (2-10%)Clothing (1-10%) Savings/Investments (0-10%)Medical (2-8%) Taxes (8-10%)Entertainment/vacation (2-5%) Personal (2-5%) Credit (0-15%) Gifts/Contributions (1-10%) 16

17. Make Your Money Matter: Use a Budget (JAN 2013) How to Create a Budget Step 1--Track current income and expenses Use a small notebook to record expenses Keep receipts Use cell phone note pad Use debit card records 1. Track Income & Expenses 2. Create Your Income & Expense Categories 3. Assign Money to each Category 4. Use/implement your plan 5. Evaluate & make adjustments 17

18. Make Your Money Matter: Use a Budget (JAN 2013) How to Create a Budget Step 2Create personal income & expense categories –Customize to suit your expenses. 1. Track Income & Expenses 2. Create Your Income & Expense Categories 3. Assign Money to each Category 4. Use/implement your plan 5. Evaluate & make adjustments 18

19. Make Your Money Matter: Use a Budget (JAN 2013) How to Create a Budget Step 3Allocate your income for the expenses –Income minus expenses should equal 0 1. Track Income & Expenses 2. Create Your Income & Expense Categories 3. Assign Money to each Category 4. Use/implement your plan 5. Evaluate & make adjustments 19

20. Make Your Money Matter: Use a Budget (JAN 2013) How to Create a Budget Step 4-Use the plan –Look for changes that can be made or that need to be made 1. Track Income & Expenses 2. Create Your Income & Expense Categories 3. Assign Money to each Category 4. Use/implement your plan 5. Evaluate & make adjustments 20

21. Make Your Money Matter: Use a Budget (JAN 2013) How to Create a Budget Step 5-Evaluate the plan and adjust –Are you reaching your goals? –Are there plan changes that can be made? 1. Track Income & Expenses 2. Create Your Income & Expense Categories 3. Assign Money to each Category 4. Use/implement your plan 5. Evaluate & make adjustments 21

22. Make Your Money Matter: Use a Budget (JAN 2013) Objectives Discuss factors that influence spending. Define a budget. Explain why a budget is key to financial stability, financial security & acquiring assets. Identify and describe the budgeting process steps. 22

23. Make Your Money Matter: Use a Budget (JAN 2013) Dont discount impact of small expenditures. Use the wait and remember technique to curtail impulse spending. Cut a routine expense for a period of time. Read articles and books with cost cutting ideas. Spend within your means. Dont spend money you dont have. Keep track of the pennies and you will worry less about the dollars. Using a budget can increase financial stability, security and acquire assets. 23 Budgeting Tips

24. Make Your Money Matter: Use a Budget (JAN 2013) 24 Closing Thought Any man can make money, but it takes a special kind of man to use it responsibly. A.G. Gaston, Businessperson 1892-1993

25. Make Your Money Matter: Use a Budget (JAN 2013) Make Your Money Matter: Use a Budget Facilitators Name Date