1. Budgeting
Ch. 6

2. Types of financial goals
Budget – plan for dividing your income among spending & savings.
Short-term goal – 1-2 years
Ex. Purchase a TV, visit a long-distance friend
Long-term goal – 2+ years
Career, education, home, business, family, retirement
Short-term leads to long-term.

3. Your goals affect others
Current family goals
Future family goals
Community involvement

4. Tracking income & expenses
See where your money goes
Income – paycheck, allowance, gifts
Spending – receipts, statements, checks
Filing system
Effective record keeping
organized, complete & easy to find

5. Fixed & Flexible Expenses
Fixed – amounts you have committed to spend.
Ex. Car payment, rent, power, phone, insurance
Flexible – choose to spend.
Ex – clothing, shoes, luxury goods – designer vs. non-name brand, entertainment.

6. Budget Worksheet
Budget worksheet – a planning document where you record expected income, actual income & short term spending.
Create a worksheet
4 columns
1st sources of income, categories of spending & savings
Expected amounts to receive, spend or save.
Actual amounts
The difference between expected & actual

7. 2) Estimate your income
Uneven income – gifts & bonuses
Income is real
3. Estimate your Expenses & savings
Plan for uneven expenses
Plan your savings
4. Record actual income & expenses
5. Calculate the differences