1. Chapter 6: Budgeting

2. Chapter 6.1 Choose Financial Goals

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

4. 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.

5. 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

6. Bell Ringer 1
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)

7. 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.

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

9. Short Term Vs. Long Term Goals
Things you hope to achieve within a year
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
Pay for a house, college, retirement, etc.
Saving over time

10. 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

11. Your Goals Affect Others
Your actions affect you and your family
Consider how your goals impact other people in your life.

12. 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?

13. 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!

14. 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!

15. Chapter 6.2: Track Income and Expenses

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

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

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

19. 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!

20. 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

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

22. 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!

23. 2nd step of budget process
List your income and expenses
This tracks where your money goes
You can use excel as a starting point!

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

25. 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!

26. Bell Ringer 2
List 2 reasons why it is important to budget your expenses.

27. Vacation Budget Project

28. 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.
Make sure you incorporate all food groups!

29. 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

30. 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

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

32. 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!

33. Food Budget Project Use ads to finish project
Total up your prices!
Turn in Blue Packet and Purple Reflection sheet
Due: Tuesday March 19th!

34. 03/18/13
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

35. Cosby Show
Budget Episode

36. Bell Ringer 3 Read “How to Squeeze A Nickel” article
Complete the answer sheet

37. Chapter 6.3: Your Budget Worksheet

38. Budget Worksheet
A planning document on which you record your expected and actual income and spending over a short time, usually a month.

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

40. 5 steps in building a budget
1. Create a worksheet
2. Estimate your income
Use NET income!
Estimate uneven income (tips, gifts, varied income)

41. 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!!

42. 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

43. Chapter 6.4: Create your budget for the year

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

45. 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.

46. Review to Change 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!

47. Peapod Activity Find a computer and Log on!
Go to the J Drive Watson Consumer Ed Peapod Activity
1. Think of meals you eat during the week for breakfast lunch and deal
2. Make a meal plan for 7 days
3. Start making a list of all the ingredients you will need
4. Use to find your items and determine prices

48. Store Brand vs. Name Brand
Store Brand Vs. Generic- Extreme Couponing
Consumer Report Video
Consumer Report 1
Taste Test

49. Questions 21-24 Word Bank A. Fixed Expense B. Long-term C. Life-Span
D. Flexible Expense
E. Short-Term
AB. Long-term Goal
AC. Wants
AD. Needs