1. Monday January 30 th Personal Finance 1. Journal: 5 reasons you need to budget Journal Which reason is most important to you and why? How can you start budgeting now? 2. Self Assessment Self Assessment 3. Net Cash Flow Activity 4. Budgeting PowerPoint Notes

2. Budgeting Essential Questions  Why is it important to have a balanced budget?  How does evaluation play a role in the budgeting process?

3. Budget  A budget is a plan for managing your money for a given period of time  A successful budget is Carefully planned Practical Flexible Written

4. Where is the money coming from?  Income: money you receive as payment for goods or services Hourly Salary Interest Capital gains Commission  Discretionary Income: money left after paying essentials

5. Gross Income vs. Net Income Total amount of money you earned during a pay period Gross Income Taxes Retirement Health benefits Payroll Deductions Take home pay The amount of the pay check Net Income Gross Income – Payroll Deductions = Net Income

6. Where is your money going?  Expenses: what you spend money on (needs and wants) Fixed expenses: cost the same amount every time Variable expenses: fluctuate in amount Periodic or occasional: don’t pay every month, can be fixed or variable  Cash Flow: movement of money in and out Income – Expenses = Cash Flow

7. What type of expense is it?  Groceries?  Cable TV Bill?  Car loan payment?  Gifts?  Auto repair bill?

8. The Most Important Expense  PYF: Pay Yourself First! Immediately setting aside money into savings whenever you receive money Used to meet long-term finance goals Built into your budget

9. Net Worth  Assets – Liabilities = Net Worth  Asset: item that has economic value  Market Value: price at which an asset would sell  Liquidity: Ability to convert an asset to cash and maintain value  Liability: Financial obligations (debts) that must be paid  Personal Balance Sheet: List of assets, liabilities, and net worth

10. Analyze your budget  0 Balance: income is equal to expenses  Variance: difference between estimated and actual expenses  Surplus: An amount left over when requirements have been met (if you spend less than you had expected)  Deficit: the amount by which a sum of money is less than the required amount (spending more than expected)

11. Things to remember  Set SMART goals  Analyze information (expenses, income, etc)  Create a plan (realistic and flexible)  Implement the plan (follow your budget!)  Monitor and modify the plan (it is not set in stone, if it is not working then change it!)