1. Budgeting

2. What is a Budget? What it is: What it takes:
A plan for spending and saving
What it takes:
CHOOSE a budgeting time period
ESTIMATE expenses and income
BALANCE expenses and income

3. Purpose for a Budget What a budget does for you: Puts you in control
Helps you prevent impulse spending
Helps you decide what you can and cannot afford
Enables you to keep track of how you spend your money
Helps you create a savings plan
Helps you set aside money for holiday gifts, vacations, and emergencies.

4. Have Clear Goals Be realistic Be specific Have a time frame
A student working part-time is not likely to be able to afford a new car.
Be specific
“I plan to save $1,000 for my college textbooks for next year.”
Have a time frame
“I plan to save $1,000 for my college textbooks for next year, within the next 6 months.”
State the action to be taken
“I plan to save $1,000 for my college textbooks for next year, within the next 6 months, by starting an automatic deposit to my savings account with monthly withdrawals from my checking account.”

5. What are fixed vs. variable expenses?
Fixed regular monthly expenses
Occur each month and are fixed payments which means they stay the same.
Payments on a house or car
Fixed variable monthly expenses
Spending that occurs monthly, but changes in cost.
Food, water, utilities, gas and electric, phone
Variable monthly expenses
Purchases/spending on items that you do not need but want.
Cell phone, clothing, entertainment

6. How do I create a budget? Step 1: Set personal and financial goals.
Step 2: Make a list of all your earnings; calculate to see your total monthly income.
Step 3:
Organize your spending into categories, and find the total for each category.
For one month keep a record of everything you spend money on, from car payments to candy bars.
Now calculate your total monthly spending.
Step 4: Create a budget for fixed and variable expenses based on your monthly income.
Step 5: Compare your budget to what you have actually spent.