1. What do you spend money on in one month?

2. Chapter 8 - Budgets

3. 8-1 Average Monthly Expenses A. Tracking Expenses – many people have trouble managing their money because they don’t keep track of all their expenses. If Amy spent $2.50 each day for lunch at school, how much did she spend in a month? $2.50 * 20 = $50 B. Average Monthly Expenses – you can group your expenses together and then find the average. Average Monthly Expense = Total Expenses Number of Months Number of Months

4. Page 107 Answers: 1. $1,781 2. $1,248 3. $99.45 4. $1,542.08 5. $45.81 6. $88.05

5. 8-2 Creating a Budget Evaluate spending - Before you create a budget, you need to evaluate your current spending and ask… Am I spending more than I earn? Am I spending too much in a certain area? Am I saving at a rate that will meet my financial goals? Do Example 1 on page 343 and A. and B.

6. Budgets – are spending plans Budgeting A budget should reflect your average monthly spending analysis as well as incorporate any changes that you want to make in your spending based on your evaluation of your spending habits. Ex: Tri-county supply budgets 5% of the previous years total revenue for utilities. The receipts from last year showed revenue of $4,500,000. How much will be budgets for utilities for the year? $4,500,000 *.05 = $225,000 …..$4,725,000 $4,500,000 *.05 = $225,000 …..$4,725,000

7. Budgeting – rule of thumbs… Save 10-20% of your income in a savings account Save 10-20% of your income in a savings account Spend no more than 25-30% of your NET pay on housing Spend no more than 25-30% of your NET pay on housing Spend no more than 20% of your NET pay on transportation, including car payment, insurance, service, gas tolls and parking. Spend no more than 20% of your NET pay on transportation, including car payment, insurance, service, gas tolls and parking.

8. If you make $500 a month and you set the following for your expenses, how much money will you be putting aside for each expense? Housing – 30% Entertainment- 15% Car/Transportation – 20% Savings – 10% Food – 20% Utilities – 15% $150$75$100$50$100$75 Total = $550 – you are over budget… make changes

9. We have two types of expenses…. Fixed Expenses – expenses that are generally the same every month…such as: Variable/Flexible Expenses – expenses that are generally different every month due to what you charge or use…such as car payment life insurance car insurance mortgage rent student loans ** These bills remain constant every month food gas/heat water electricity telephone clothes/shoes/apparel entertainment –movies, bowling…etc. ** These bills vary month to month depending on usage or consumption.

10. Tracer Family Budget CategoryPercent of Income CategoryPercent of Income Housing 25% Utilities 5% Life Insurance 10% Transportation 15% Food 15% Clothing 2% Entertainment 3% Savings 15% health Care 5% Miscellaneous 10% Income $3,000 What amount of money is budgeted for clothing? What amount of money is budgeted for food? $450 $60

11. If we know what we spent (on an average) for 4 months on food, we can budget our food expense for the following month. Joe spent the following on food during June, July, August and Sept. $100, $120, $123 and $97 How much should he budget for October? 100 +120+123+97=440 …440/4 = $110

12. Calculating a % increase or decrease…. If Sue saved $500 this year, but only saved $360 last year, what was her % increase in her savings? How do we figure this??? Difference Original amount (Known as difference divided by original) ($500-$360)$360.388888 = 39%

13. Please get out: calculator whiteboard rag marker

14. If last year I made $200 profit on my lemonade stand and this year I made $245, what % increase did I have? Difference Original amount $245-200 $200.225 = 22.5%

15. Now, using your whiteboard… draw this graphically

16. $200 $245 The difference is $45 OR a 22.5% increase

17. How do we figure out a best buy?

18. Before calculating your best buy, you MUST know your weights and measurements.

19. 8-3 Best Buys In order to compare two products, you must make sure you are comparing their unit prices…compare oranges to oranges….ounces to ounces

20. Many items are sold in units that are not singular…ie: eggs in a dozen, soft drinks in 2- liters, nails by the 100’s. Sometimes items are sold as: Sometimes items are sold as: A. Fractional quantities…. ½ dozen A. Fractional quantities…. ½ dozen B. Mixed number quantities…3 ½ yards. B. Mixed number quantities…3 ½ yards. C. Large quantities, such as a hundred or a thousand C. Large quantities, such as a hundred or a thousand

21. Finding the cost of a fraction unit…IE: what is the cost of 2/3 yards at 63 cents a yard? IE: What is the cost of 2/3 yards at $.63 a yard? 63 x 2/3 = 21 x 2/1 = 42 cents OR Turn your fraction into a decimal, multiply and then round to the nearest cent…such as 2/3 =.6666666 Then take.66666 x.63 and you will still get.42 (rounded)

22. **** Some stores treat any fraction of a cent as an added cent. Other stores round fractions to the nearest cent and drop fractions of less than ½ cent and raise fractions of ½ cent or more to the next full cent. How much is 1 orange at 3 for $1.00?… it should be $.33, but some stores will charge the extra penny on the first item and make it $.34 How much is 1 orange at 3 for $1.00?… it should be $.33, but some stores will charge the extra penny on the first item and make it $.34

23. Finding the cost when quantities or prices are mixed numbers. IE: You want to buy 3 ¼ yards of fabric at $8.89 per yd. What is the cost? 3.25 x $8.89 = $28.8925…or $28.89 rounded

24. Finding the cost for large quantities. Example #1: If I went to Home Depot to buy 5,500 nails, and the nails were priced at $22.50 per thousand, what would the cost be? 5,500 divided by 1,000 = 5.5 5.5 times $22.50 = $123.75 Example #2: Find the cost of a 9,000 lbs. rock at $88 per ton 9,000 divided by 2,000 = 4.5 tons 4.5 x $88 = $396

25. Finding the cost for large quantities. Example #3: Find the cost of 2,560 computer diskettes at $89 per hundred 2,560 divided by 100 = 25.6 25.6 x $89 = $2,278.40 25.6 x $89 = $2,278.40

26. Finding a Unit Price from a Group Price IE: Soup is 89 cents a can or 3 for $2.60. If you buy 3 cans, what is the price per can? _____ Why do vendors do this? _______________________ Finding the Unit Price When the Item Price is for a fraction of a Unit. IE: a 5 oz tube of toothpaste costs $1.50. How can we find out the price per pound? (remember 16 oz = 1 lb.) 5 oz = 5/16 lb 5 oz = 5/16 lb $1.50 divided by 15/16 = $4.80 price per pound.

27. Finding the Unit Price When the Item Price is for a Mixed Number Quantity IE: A 1 ¼ qt bottle of bleach sells for $2.29. What is the price per quart? $2.29 divided by 1.25 = $1.832 per quart

28. Questions… 1. A store sells an 18-oz box of Cheerios for $3.29 and a 24- oz box of Keller’s O’s for $3.99. Which box sells for less per ounce? How much less per ounce? 2. You can buy a package of four D batteries for $5.99 or a package of two D batteries for $3.49. Which package costs less per battery? How much less per battery?

29. Questions… 1. How much will you save by buying 12 rolls of film now at $3.98 rather than buying 12 rolls buying 1 roll at $4.39 at a time? 2. A 53.7 square foot roll of Country paper towels costs $1.49. An 80.6 square foot roll of the same paper towels costs $1.89 on sale. Which is less expensive?

30. Questions… 1. After the holidays you can buy boxes of greeting cards@ 2 for $32. The same boxes sold during the season for $23.99 each. If you bought 6 boxes after the holidays, how much would you save?

31. Buying Wisely… Often a product costs less when it is purchased in large amounts, combined with other items, or used with a discount. You can save money by buying products on sale or by shopping at stores that sell items at a discount. In addition, you may save money by renting items you do not use often. Often a product costs less when it is purchased in large amounts, combined with other items, or used with a discount. You can save money by buying products on sale or by shopping at stores that sell items at a discount. In addition, you may save money by renting items you do not use often. 1. A floor sander can be rented for $7 an hour or $40 a full day. If you estimate that it will take you 6 hours to sand the floors in two rooms, which rate would be the least expensive?

32. 1. Cary wants to rent a large screen video projection system to see games 3, 4, and 5 of the World Series. The projection system rental price by the day is $130 and by the week, it is $600. If the three games are played over 4 days, which rental rate will be the least expensive for him? 2. Jill Sun plans to pain her garage and estimates that it will take about 5 hours to do it with a paint sprayer. She can rent a sprayer at an hourly rate of $18, at a half-day (8 hours) rate of $56, or a full-day (24 hours) rate of $80. Which is the least expensive rental rate for the task?

33. Do Example 2 on page 338 and C. and D. Do Example 3 on page 339 and E. and F. Page 107 in workbook = homework Page 340: 13. $62.13 14. $3,230.76 15. $104.13 16. $5,414.76 17. $199.21 21. $195.80 27. $164.99

34. Page 341 41. $487.20 42. $13,500; $121,500; $15,275 43. $24.10 44. $18,040 45. $884.25 46. $643

35. Ch 8 – Budgets 8-1 Average Monthly Expenses A.___________________ – many people have trouble managing their money because they don’t keep track of all their expenses. If Amy spent $2.50 each day for lunch at school, how much did she spend in a month? B.___________________ – you can group your expenses together and then find the average. Average Monthly Expense = Total Expenses Number of Months

36. Budgets – are spending plans Budgeting A budget should reflect your ________ ________ spending analysis as well as incorporate any ________that you want to make in your spending based on your evaluation of your spending habits. Ex: Tri-county supply budgets 5% of the previous years total revenue for utilities. The receipts from last year showed revenue of $4,500,000. How much will be budgets for utilities for the year? ________________________________________

37. Budgeting – rule of thumbs… Save _________ of your income in a savings account Spend _______ than ______ of your NET pay on housing Spend _______ than ______ of your NET pay on transportation, including car payment, insurance, service, gas tolls and parking.

38. 8-2 Creating a Budget If you make $500 a month and you set the following for your expenses, how much money will you be putting aside for each expense? Housing – 30% Entertainment- 15% Car/Transportation – 20% Savings – 10% Food – 20% Utilities – 15% $___ Total = ______ – ________ ________ ________ ________ ________

39. We have two types of expenses…. _______________– expenses that are generally the same every month…such as: ___________________– expenses that are generally different every month due to what you charge or use…such as ______________ ______________ ** These bills remain constant every month ____________________________ ______________ ** These bills vary month to month depending on usage or consumption.

40. Tracer Family Budget CategoryPercent of Income Housing 25% Utilities 5% Life Insurance 10% Transportation 15% Food 15% Clothing 2% Entertainment 3% Savings 15% Health Care 5% Miscellaneous 10% Income $3,000 What amount of money is budgeted for clothing? ________ What amount of money is budgeted for food? ________

41. Calculating a % increase or decrease…. If Sue saved $500 this year, but only saved $360 last year, what was her % increase in her savings? How do we figure this??? Difference Original amount (Known as difference divided by original) ($500-$360) $360.388888 = 39%

42. 8-3 Best Buys In order to compare two products, you must make sure you are comparing their unit prices ** Compare oranges to oranges….ounces to ounces

43. Many items are sold in units that are not singular…ie: eggs in a dozen, soft drinks in 2- liters, nails by the 100’s. Sometimes items are sold as: A. Fractional quantities…. ___________ B. Mixed number quantities…______ yards. C. Large quantities, such as a _________ or a _______________.

44. Finding the cost of a fraction unit…IE: what is the cost of 2/3 yards at 63 cents a yard? IE: What is the cost of 2/3 yards at $.63 a yard? ___________________________________ OR __________________________________________

45. **** Some stores treat any fraction of a cent as an added cent. Other stores round fractions to the nearest cent and drop fractions of less than ½ cent and raise fractions of ½ cent or more to the next full cent. How much is 1 orange at 3 for $1.00?… ____ _____________________________________

46. Finding the cost when quantities or prices are mixed numbers. IE: You want to buy 3 ¼ yards of fabric at $8.89 per yd. What is the cost? ____________________________________

47. Finding the cost for large quantities. Example #1: If I went to Home Depot to buy 5,500 nails, and the nails were priced at $22.50 per thousand, what would the cost be? _________________________________ Example #2: Find the cost of a 9,000 rock at $88 per ton _________________________________

48. Finding the cost for large quantities. Example #3: Find the cost of 2,560 computer diskettes at $89 per hundred _________________________________

49. Finding a Unit Price from a Group Price IE: Soup is 89 cents a can or 3 for $2.60. If you buy 3 cans, what is the price per can? _____ Why do vendors do this? _______________________ Finding the Unit Price When the Item Price is for a fraction of a Unit. IE: a 5 oz. tube of toothpaste costs $1.50. How can we find out the price per pound? (remember _____ oz. = 1 lb.) _______________________________________

50. Finding the Unit Price When the Item Price is for a Mixed Number Quantity IE: A 1 ¼ qt bottle of bleach sells for $2.29. What is the price per quart? ________________________________________

51. Buying Wisely… Often a product costs less when it is purchased in large amounts, combined with other items, or used with a discount. You can save money by buying products on sale or by shopping at stores that sell items at a discount. In addition, you may save money by __________ items you do not use often. 1. A floor sander can be rented for $7 an hour or $40 a full day. If you estimate that it will take you 6 hours to sand the floors in two rooms, which rate would be the lest expensive? ________________________________________