1. BUDGETING: Making the Most of Your Money

2. Did You Know? 1. Almost 60% of millionaires use a budget to manage their money. 2. The average person spends money three times day. 3. Putting aside every coin you touch usually results in saving about $50 a month. 4. A $5 sandwich usually has less than 1$ worth of ingredients. 5. If you purchase a soda a day for a year, you will have spent approximately $365

3. Your Financial Plan: 5 Step Plan I. Set Up SMART Financial Goals - Goals may be short term, intermediate, or long term A. Specific Goals B. Measurable C. Attainable D. Realistic E. Time Bound - complete “Are the Goals SMART?” in packet - complete 1-4 My SMART goals in packet - Start a spending log

4. Your Financial Plan: 5 Step plan II. Analyze Information - analyze your income sources - analyze your expenses III. Create a Plan 1. Identify your goal 2. Establish your criteria 3. Examine your options 4. Weigh the pros and cons 5. Make your decision 6. Evaluate the results

5. Your Financial Plan: 5 step plan IV. Implementing the Plan 1. Have a friend help you stay on track to your financial goals 2. Write your goals out 3. Review your plan regularly - What could get in the way of your plan? V. Monitor and Modify the plan 1. Your plan may change as things change in your life. ex: get a new job, get a girlfriend, etc….

6. Where should all my money go? I. Budget - The plan for savings and spending - A plan for managing your money during a given time period. A. Smart Spending 1. A spending plan (budget) will help you prioritize your spending and savings. B. Income 1. Cash flow: Money that you have coming in as well as money you have going out. 2. Income: the money you have coming in. (job, allowance, interest, etc…) 3. Taxes: fees that support government programs and are required by law to be applied to income, property, or goods. 1.Federal income tax 2.State income tax 3.Social Security 4.Medicare

7. Where should all my money go? 4. Gross Income: total amount of income from your wages before any taxes. 5. Net income: “take home pay” income after taxes. TRUE or FALSE: Gross income is greater than net income. C. W-4 1. Form you fill out when you start a job. 2. Claim allowances that has you pay taxes regularly throughout the year. Why?

8. Where Should All my Money Go? D. Expenses - what you spend money on 1. fixed expenses: cost the same amount every time. 2. Variable expenses: fluctuate in amount 3. Period expenses: ones you don’t pay every month Can You Give Examples of Each that you or your Family has? - Fill in the chart on your unit packet (2C) 4. Savings (is an Expense): money you put aside for future spending. - P.Y.F = Pay Yourself First - Fill in the SMART Goals on your unit packet 2-3

9. Where Should All My Money Go? E. The 411 on Creating a Budget 1. Set SMART Goals 2. Analyze Information 3. Create a Plan 4. Implement the Plan 5. Monitor and Modify Assignment: Read pages 22 and 23 of your packet and complete “2-4 Build a Budget” ** Budgets are not meant to be written in stone, they change over time.