1. B UDGETING 101

2. W HAT ARE YOUR FINANCIAL GOALS ? What kinds of items would you like to purchase? Do you plan to pay for a college education? Do you want to earn a certain amount of money by a particular age?

3. R EACHING F INANCIAL G OALS In order to reach your goals, you need a budget Budget = a plan for spending and saving Track your cash flow how much money comes in (income and earnings) and how much money goes out (expenses and spending) each month Control cash flow by creating a good budget

4. Over the past two weeks, what have you spend money on? Food, clothing, electronics? Did you go to the movies or out to a restaurant? Different types of expenses: fixed expenses (are the same each month) rent, phone or car Variable expenses (change in price and frequency each month) Food, gas, clothing Label your purchases as fixed or variable expenses Do your goals fit into these categories? Knowing how money fits into these categories will help to build an accurate budget

5. I NCOME AND E ARNINGS When you have a job, you earn what is called a gross income The total amount of money you earn before taxes State, federal, and social security taxes are all deducted from your gross income Once taxes are deducted, you are left with your net pay The actual money you take home The number you start with when building a budget

6. B UDGET S CENARIOS Now you will get a chance to study three different budgets showing fixed and variable expenses Decide which budget is the most effective in meeting the budgeter’s individual goals Which budget do you think is the most successful in meeting the budgeter’s goals? What kinds of adjustments could be made to meet the goal sooner?