1. Chapter 6
Budgeting

2. Budgets Plan for dividing income among spending and saving
Based on financial goals
Ex. Save $3,000 for car down payment
Ex. Reduce food spending by $100/month
Control short-term spending to achieve long-term goals

3. Keep Financial Records
Track your income
Track your spending
Establish a filing system
Effective record keeping

4. Types of Expenses Regular Discretionary
Must pay to live normally
Discretionary
Are not necessary
Fixed
Same amount every month
Flexible
Amounts vary from month to month

5. Income ≥ Expenses + Savings
Budgeting Worksheet
Income
Projected
Actual
Expenses
Projected
Actual
Difference
Income ≥ Expenses + Savings

6. Create Your Budget Worksheet
Step 1: Create a Worksheet
Step 2: Estimate Your Income
Step 3: Estimate Your Expenses and Savings
Step 4: Record Your Actual Income and Expenses
Step 5: Calculate the Differences

7. Revising a Budget Reduce discretionary expenses
Ex. Entertainment, personal care
Reduce regular flexible expenses
Ex. Decrease electric, gas, water usage
Reduce regular fixed expenses
Ex. Decrease housing expenses w/a roommate