1. Transportation Groceries Gas/Fuel Home Insurance Car Insurance Education Rent/Mortgage Utilities Child Care Medical Emergency Fund

2.  In order to plan for the future, you need a budget. Take Simon, a grade 12 student working part time. His budget looks like this: INCOME ($)EXPENSES ($) Week 1136.74College Savings200 Week 2188.20Insurance123 Week 3209.38Fuel75 Week 4173.66Entertainment100 Total707.98Total498 Balance (Income – Expenses) = 707.98 – 498 = 209.98 According to this balanced budget, Simon is able to save just over $200 a month

3.  Every year, expenses go up, for example:  Car Insurance increases by 5%  Grocery Expenses increase by 10%  Home Heating Costs rise 15%  Simon’s budget was simple, as the only expenses he had were:  College Savings  Insurance  Fuel  Entertainment  Let’s look at what a family budget would look like.

4. INCOME ($) Spouse 13200 Spouse 22900 Total6100 EXPENSES ($) Fixed ExpensesVariable Expenses (Average) Mortgage & Property Tax2040Groceries800 House Insurance32Electricity120 Car Insurance188Heating220 Life Insurance500Water65 Long-Term Savings580Telephone35 RESPs400Internet35 Cable Television30 Medical170 Clothing150 Home Repair Account200 Charities50 Entertainment200 Vacation Amount200 Children’s Accounts150 Gift Account100 Total Fixed3640Total Variable2460 Total Expenses6100

5.  Expenses change over time, so one must be prepared to re-balance a budget  What if expenses go up as discussed before?  Car Insurance increases by 5%  Grocery Expenses increase by 10%  Home Heating Costs rise 15%  The couple would have to rebalance their budget  Which expenses would they have to modify?  Variable Expenses

6.  p. 472 #1, 3, 6