1. Managing your Money
Chapter 20
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2. Objectives Identify the steps involved in planning a budget
Explain how to keep records effectively
Describe strategies for staying within your budget
Identify personal changes that might affect your finances
Discuss ways to adjust to economic change
List several sources of help for financial problems.
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3. Budget
Plan for saving & spending money based on your income & expenses
Well-planned budgets can give you a feeling of confidence that you’ll be able to handle everyday needs as well as achieve dreams for your future lifestyle
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4. Planning your budget Three important questions
What are your lifestyle goals?
What’s really important to you?
What do you have, and what do you need?
Defining goals – Short & Long-term
Making choices
Estimating income (net pay) & expenses (both fixed & flexible)
1d. You’ll use your answers to develop a budget plan.
2. Make a list of things you need to buy now and in the future
3. you’ll probably have more items on the list they you have money for. Prioritize what is most important for you…distinguish between needs & wants
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5. Preparing and Following your Budget
Be realistic
Keeping effective records
Recommendations
Keep files where you can get to them easily
File bills & records
Keep a calendar to record when bills are due & when they were paid
Buy a fireproof box or rent a safe-deposit box for important documents (insurance papers, birth certificates, car titles, etc.)
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6. Fine-tuning your budget
Getting started (fig. 20.2)
Categories
Income
Fixed expenses
Flexible expenses
Savings
Look at budgeted vs. actual spending
Fine-tuning your budget
If budget does not balance…either cut spending or increase income
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7. Financial responsibility
As you move toward adulthood, your financial responsibility increases
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8. Adjusting to economic change
Inflation
Budget may need to be refigured because things get more expensive
Coping w/inflation
Cut back on unnecessary expenses
Look for a 2nd job to increase income
Shop smart! Look for sales and buy in bulk
First…it’s not just personal events that can change your financial outlook. Events throughout the nation & world also can affect your finances.
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9. Recession Save as much money as possible
Accept job placement help if laid off
Talk to a loan officer at a bank to see if you can refinance any debt to lower payments
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