1. Budget Basics

2. Why Do Budgets Get a Bad Rap?
Does the mere mention of the word “budget” conjure up images of drudgery and deprivation? You’re not alone. Most people think budgets are
Rigid and inflexible
Painful – who wants to eat Top Ramen every night?
No fun!

3. Why Budgets Really Do Make Sense
A good budget should help you set priorities and achieve what’s important to you. Not what’s important to your banker, your best friend, or your relatives. A good budget should be
Flexible: It should change as your needs change.
Ongoing: It’s not a one-time event. A budget should be part of your everyday life.
Clear and easy to use: 12 page spreadsheets are out!

4. Budgets: Where to Start
Be clear on what you make and how much you spend.
Anticipate all of your potential expenses.

5. Budget Categories Income Savings Expenses Gross Net Emergencies
Long-Term
Retirement
Short-Term
Expenses
Fixed
Variable
Discretionary

6. Income: The Amount of Money Earned
Gross income: An individual’s income before taxes.
Net income: Income after taxes are paid.
Fasten your seat belts: Taxes can range from 15% to 31%. Yikes!

7. The Amazing Disappearing Paycheck
Your first real job pays $30,000/year. You’re rolling in the bucks, right? Not necessarily.
Your salary is your gross income. Take off at least 25% for taxes and other deductions. That’s what’s left for you to spend.
Example:
Gross salary = $30,000
Minus 25% taxes and deductions ,500
Net income $22,500
Quite a hit, huh?

8. Savings: Pay Yourself First
Savings is unspent income.
Types
Emergencies: Plan to set aside three months’ living expenses
Long-term: Large ticket items (house, car, college)
Retirement: It’s never to early to start
Short-term: Vacation, clothes, new skis

9. Expenses Expense: A cost to meet a need or pay a debt
Types of expenses
Fixed
Variable
Discretionary

10. Fixed Expenses A cost that occurs regularly and doesn’t vary in amount
Rent
Mortgage
Car payment
Insurance premium
School loans
Others?

11. Variable Expenses A cost that occurs regularly but may vary in amount
Electricity
Water and Garbage
Telephone
Gasoline
Groceries
Others?

12. Discretionary Expenses
A cost determined by personal wants that may be controlled
Movies, videos, CDs
Sports
Eating out
Grooming and clothes
Concerts and plays
Vacations
Others?

13. Budget Basics Summary Establish a budget with the following:
Income
Savings
Expenses
Fixed
Variable
Discretionary
End up with a budget surplus and you’re a success!
Set your priorities. What do you want to accomplish with your money?

14. opening a checking account
Teens – Lesson 6 - Slide 6-C

15. reading a bank statement
Teens – Lesson 6 - Slide 6-H

16. making a deposit
1. Write the date you are making the deposit in this field.
2. If you are depositing currency (paper bills), write the total amount here.
3. If you are depositing coins, write the total amount here.
4. If you are depositing a check, write the bank transit number here, which is the top portion of the two-part number printed in the upper corner of the check.
5. Write the amount of the check here.
6. If you are depositing more checks than can be listed on the front, continue to list them on the back, and write the total amount of the checks on back here.
7. Write the total amount you are depositing here.
8. If you are making a deposit inside a bank with a teller and you want to receive cash back from your deposit, write the amount you want in this field.
9. Write the total amount (less cash back) of your
Teens – Lesson 6 - Slide 6-D

17. writing a check 1. Date Enter the date you are writing the check.
2. Payee Enter the name of the person or the company you are going to give the check to.
3. Amount of check in numerals Enter the amount of the check, in numbers. Don’t leave any space between the pre-printed dollar symbol ($) and the numbers indicating the amount of the check; there should be no room for someone to add in extra numbers.
4. Amount of check in words Enter the amount of the check in words. Start writing at the far left side of the line. Follow the dollar amount by the word “and,” then write the amount of cents over the number 100. Draw a line from the end of the 100 to the end of the line.
Teens – Lesson 6 - Slide 6-Fa

18. writing a check (continued)
5. Name Your personal information is printed here. Never list your Social Security number on your printed check.
6. Signature Sign your check exactly the way you signed your name on the signature card you filled out when you opened your account.
7. Memo Use this space to note why you wrote the check. If you are paying a bill, this is a good place to put information requested by the company.
8. Identification numbers These numbers are used to identify the bank, your account number, and the check number. They are printed in a special magnetic ink that machines can read.
Teens – Lesson 6 - Slide 6-Fb

19. endorsing a check blank endorsement Anyone can cash check
restrictive endorsement
More secure than blank endorsement
special (or full) endorsement
Transfer check to another party
Teens – Lesson 6 - Slide 6-E

20. keeping a running balance
(a) Keeping a Running Balance: Check Transaction
(b) Keeping a Running Balance: ATM Cards
Teens – Lesson 6 - Slide 6-Ga

21. keeping a running balance (continued)
(c) Keeping a Running Balance: Check Cards
Teens – Lesson 6 - Slide 6-Gb