1. Personal Finance Budgeting-Chp. 6 Day 11

2. Step 3: Preparing a Budget Worksheet  Budget worksheet-a planning document on which you record your expected and actual income and spending over a short time, usually one month.

3. Preparing a Budget Worksheet  Step 1: Create a Worksheet.  List sources of income and categories of spending and saving.  Record the amounts you expect to receive, spend, or save during the month.  Record the amounts you actually receive, spend, or save.  Record the difference.

4. Preparing a Budget Worksheet  Step 2: Estimate Your Income  Use net income from your paycheck stubs.  Estimate uneven income.  Be sure the income is real.

5. Preparing a Budget Worksheet  Step 3: Estimate Your Expenses and Savings  List your fixed and flexible expenses.  Plan for uneven expenses.  Plan your saving.  Total Expected Income-Total Expected Expenses and Savings = Zero

6. Preparing a Budget Worksheet  Step 4: Record Your Actual Income and Expenses  At the end of the month, review your receipts and fill in what you actually had for income, expenses, and savings.

7. Preparing a Budget Worksheet  Step 5: Calculate the Difference  Actual amount-expected amount  + received more than or spent less than you expected in that category  – received less than or spent more than you expected in that category

8. Budget Pitfalls  Some people get too detailed or too specific.  Some people don’t predict the correct amount of their flexible expenses.  Some people lump too many expenses under miscellaneous.  Some people give up on budgets because they think it takes too much time and effort to create and maintain them.

9. Step 4: Review and Adjust Your Budget Worksheet  Evaluate what your budget tells you.  Adjust your spending.  Change your future spending to match the expected spending on your budget worksheet. OR  Adjust your expected budget worksheet to make a new plan.  Make several plans.

10. Step 5: Create Your Budget for the Year  A summary of all your budget worksheets for 12 months.  Helps you plan steps toward major goals that may take many years to achieve.

11. Step 5: Create Your Budget for the Year  See example budget p. 208.  Total Income = Expenses + Saving  Relate your goals to your budget.  Adjust to changing goals.

12. Step 5: Create Your Budget for the Year  Family Budget  The way one family member spends often affects others.  Plan together.  Compromise.

13. Assignments  Creating Your Own Budget worksheet  Due tomorrow