1. Chapter 6: Budgeting

2. Cosmo Quiz Read each question on the Cosmo Quiz. Total up your answers
Determine how you manage your money!

3. Cosmo Quiz Scoring 1. a. 5 b. 1 c. 3 2. a. 1 b. 3 c. 5 3. a. 3 4. 5.6.
c. 1 7. 8.

4. Scoring Results 10 – 20 points
You tend to be a bit overcautious with money. You don’t mismanage your money, but you’re not being fair to yourself either. You should treat yourself to something special.
21 – 30 points
You manage your money wisely. When you receive money, you know exactly what to do with it. You save some of your money and leave some left over for yourself.
31 – 40 points
You tend to be a bit careless when it comes to managing money. Money burns a hole in your pocket. You need to learn to be a little more conservative with the money you receive. You will soon find that your finances will fall into place.
Have students read their results based on the score of their quiz

5. Bell Ringer- 03/04/15
Write down 3 short term spending goals you have (within 6 mo- yr)
Write down 3 long term spending goals you have (1 yr-more)

6. If I had a Million Dollars
Barenaked Ladies- If I Had A Million Dollars

7. Millionaire Questions
Read each statement and determine whether you think it is true or false.
Include some reasoning as to why you came to that conclusion.

8. Millionaire Answers Most millionaires inherit their wealth.
False—About 80 percent of millionaires are first-generation affluent.
Most millionaires earn more than $500,000 per year.
False—Less than 15 percent of millionaires have income over $500,000 per year.

9. Millionaire Answers
College graduates earn much more than high school graduates do.
True----fact, according to 2007 Census Bureau statistics, the average college graduate earned 78 percent more than the average high school graduate. People with professional degrees earned 255 percent more than high school graduates.

10. Millionaire Answers
People who are self-employed usually become millionaires.
True—More than half of the millionaires are self-employed.

11. Millionaire Answers All millionaires wear expensive clothes.
False—Fifty percent of millionaires have never paid more than $400 for a suit; 90 percent of millionaires have never paid more than $1,000 for a suit.

12. Millionaire Answers Millionaires usually drive new cars.
False—Less than 25 percent of millionaires drive a current-year car and more than half drive a car that is more than two years old.

13. Millionaire Answers
Many millionaires drop out of college to start work.
False—Four out of five millionaires are college graduates. Eighteen percent have master’s degrees, 8 percent law degrees, and 6 percent Ph.D’s.

14. Millionaire Answers It’s possible to save enough to be a millionaire.
True—For example, if a 22-year-old saves just $50 per week ($2,600 per year) during his or her entire working life and earns a 9 percent rate of return on the investments, the saver would have more than $1 million by age 63.

15. Chapter 6.1 Choose Financial Goals

16. Budget A plan for dividing income among spending and saving options.
It can help you achieve more of what is important to you during your life span.

17. First Step in Budget Process..
First step in budgeting process is to consider important goals you have set in your life-span plan

18. Short Term Vs. Long Term Goals
Things you hope to achieve within a year
Example: Spending $200 to visit a friend who moved away
Can be achieved quickly
Long Term
Things you want to achieve over more than a year
Example: Pay for a house, college, retirement, etc.
Saving over time

19. Balancing Long Term Spending with Long Term Success
Control short term spending
Saving NOW!!
Spending to satisfy short term wants can affect your future plans
Evaluate priorities

20. Your Goals Affect Others
Your actions affect you and your family
Consider how your goals impact other people in your life.
Think about what expenses you may have that can affect all of your family members…

21. Your Goals Affect Others
Your Current Family
You have a goal of being a computer programmer
Paying for this degree requires a lot of money for your education
Most parent help out in getting loans to help their children
It can take many years to pay off the loan
How might this financial burden affect your lives?

22. Your Goals Affect Others
Future Family
75% of people marry before 30 yrs old
Your decisions now or in the next few years can affect the person you marry
By borrowing you trade future spending for current spending
Borrow Responsibly!

23. Your Community and Your Goals
You go to school
Get a job
Earn money
Start a family
The work you choose to do can benefit many people in your community!

24. Budget Categories Housing Transportation Food Savings Entertainment
Insurance/ Medical
Other
30%
20% (car, gas and oil)
15% (groceries & rest.)
10% 5%
15%

25. Chapter 6.2: Track Income and Expenses

26. Bell Ringer 10/9 Look at the money picture document.
Pick 2 of the “quotes” or “statements” and explain whether you agree or disagree with the statement.

27. Income V. Expenses Income Expenses Savings Account Interest
Investment Dividends
Investments
Paycheck
Checking Account Interest
Auto Insurance
Gas
Hair Care
Home Insurance
Lunches
Property Tax
Car Maintenance
Donations
Student Loan Interest
Rent
Mortgage
Mortgage Interest

28. Fixed V. Flexible Fixed Flexible Car Insurance Mortgage Rent
Renter’s Insurance
Student Loan Repayment
Car Payment
Gas
Savings
Utilities
Entertainment
Groceries
Hair Care
Investments
Parking
Pet Care
Train Passes
Vacation Fund

29. Budget Categories

30. Income
Money you receive in the form of:
Paycheck
Cash
Gifts
Tips

31. Expenses Items you spend your income on Income Cell phone bill Rent
Groceries
Cable/Internet
Income

32. Filing System Labeled file folders Computer spreadsheet
File receipts, check stubs, and notes about income or purchases
Computer spreadsheet
Keeps spending organized so you can plan for vacations, major purchases, and long term expenses

33. Record Keeping File each record as you receive it
File folder or computer spreadsheet
Keep all your records in files and all your files in one place!

34. Fixed Expense
Amounts you are committed to spend and are generally the same amount each month.
Rent/mortgage
Cell phone bill
Cable bill
Car payment

35. Flexible Expenses Varies month by month
Amounts you can choose to spend or not to spend
Clothing
Groceries
Entertainment: movies, concerts, restaurants

36. Luxury Goods
Goods that have special qualities that make them more expensive then alternative goods.
Sports car vs. A used compact car
(Lexus vs. Toyota)
Coach purse vs. Purse from Kohls
You must choose among flexible spending options. Prioritize your options!

37. 2nd step of budget process
List your income and expenses
This tracks where your money goes
You can use excel as a starting point!

38. Fixed Expenses Advantage
You know how much you have to pay and when you have to pay it!

39. Budget Activity Fill in monthly gross pay
Determine net pay using given tax information
Disposable Income
Distinguish between fixed and flexible expenses
How much money do you have left over after your bills have been paid?
Discretionary Income

40. Food Budget Open your Life Smart Project to Page 3
Underneath your bell ringer, write down your monthly net pay from your life smart project (found on tax page 3).
Multiply this amount by 15%
This is your food budget!

41. Food Budget
Brainstorm using the calendar to create a meal plan for the month of March.
Identify breakfast, lunch, dinner, and snacks.
List the ingredients you need to complete your meal plans.

42. Fruits and Vegetables
Lack of fruits and vegetables can affect your health
Fiber: good for heart and intestines
Potassium: good blood pressure
Vitamin A: healthy eyes and skin; protects against infections
Vitamin C: heals cuts and wounds; healthy teeth and gums
Fat: Low Calories

43. Side Affects of Food
Lack of food- tired, unable to focus, feel weak, and nauseated
Diet soda- contain artificial sweeteners head aches and mood swings
Caffeine- can trigger anxiety; mood swings
Saturated Fats- cause blockages in veins and arteries heart attack and strokes

44. Food Groups
Check the male and female serving size chart in your packet to determine your need for each day.

45. Food Budget
1. Use the grocery store ads and grocery price lists to identify the cost of your ingredients.
2. Use a calculator to add up your list.
3. Complete the food budget reflection!

46. Food Budget Project Use price lists to finish project
Total up your prices!
(for prices)
Turn in Food budget Packet & Reflection sheet

47. Bell Ringer- 10/10/13
List 2 reasons why it is important to budget your expenses.

48. 03/6/2015
Work on the short and long term financial goals tab of your Life-Smart Project
Choose 1 item you want to buy short term
Search 2 places you can buy this item at
Research Pricing
Choose 1 item you want to buy long term

49. Chapter 6.3: Your Budget Worksheet

50. Budget Activity Fill in monthly gross pay
Determine net pay using given tax information
Disposable Income
Distinguish between fixed and flexible expenses
How much money do you have left over after your bills have been paid?
Discretionary Income

51. Bell Ringer 03/11 How to Squeeze a Nickel Article
Write down 3 savings tactics you think you would be able to do
Write down 2 things you could absolutely not do
Write 1 savings tactic of your own.

52. Budget Worksheet
A planning document on which your income and expenses are listed.

53. Information on Budget Worksheet
Sources of income
Expected Amount
Actual Amount
Over or Under
Fixed Expenses
Flexible Expenses
Savings

54. 5 steps in building a budget
1. Create a worksheet
2. Estimate your income
Use NET income!
Estimate uneven income (tips, gifts, varied income)

55. 5 steps in building a budget
3. Estimate Your Expenses and Savings
Plan for uneven expenses
Car insurance, property tax, etc.
Charitable Giving
Plan your savings
You should save 10% of your Net Pay each month!
Try not to spend this amount!!

56. 5 steps in building a budget
4. Record Actual Income and Expenses
As you spend money, write it down!
Make sure you are also filing receipts in your file box!
5. Calculate the difference
Subtract expected amounts from the actual amount in each row.
In the over under column, record the difference

57. Cosby Show
Budget Episode

58. Chapter 6.4: Create your budget for the year

59. Homecoming Budget
Make a prediction of how much Homecoming week will cost you!
Record the cost for the pieces of clothing you are wearing today!
Shirt, jeans, toga, shoes, socks, etc.!
Even if you didn’t buy all your clothes new for today, you paid for them at one time…
Estimate how much they cost
If you are unsure, you can look it up on your phone

60. Audit
Checking your budget for accuracy and to determine whether it is helping you to achieve your goals

61. Review Your Budget once a year
Can help you plan steps toward major goals that may take many years to achieve
House, retirement, college, etc.

62. Review to Changed Goals
People change overtime
Your goals may be different in 5 years
When your goals change, your budget should change
A budget is a flexible tool to help you achieve what you want!

63. Budget helps with debt
How?

64. Brand Vs. Generic
Taste Testing

65. Peapod Activity Find a computer and Log on!
Go to the J Drive Gordon Peapod Activity
1. Think of meals you eat during the week for breakfast lunch and dinner
2. Make a meal plan for the month of November
3. Start making a list of all the ingredients you will need.
4. Use peapod/price lists to find your items and determine prices