1. © 2008 Pearson Addison-Wesley. All rights reserved Chapter 4 Managing Your Money

2. Copyright © 2008 Pearson Education, Inc. Slide 4-2 Unit 4A Taking Control of Your Finances

3. Copyright © 2008 Pearson Education, Inc. Slide 4-3 Controlling Your Finances Know your bank balance: Never bounce a check or have a debit card rejected. Know what you spend: Keep track of debit and credit card spending. Don’t buy on impulse. Think first; buy only if the purchase makes sense. Make a budget and don’t overspend it. 4-A

4. Copyright © 2008 Pearson Education, Inc. Slide 4-4 A Four-Step Budget 4-A 1.List all monthly income, including a prorated for any income not received monthly (such as once-a- year payments). 2.List all monthly expenses, including a prorated amount for expenses that don’t recur monthly. 3.Subtract total expenses from total income to determine your net monthly cash flow. 4.Make adjustments as needed.

5. Determining What Kind of Adjustments to Make Only you can ultimately decide what kind of adjustments will work for you. Here are a couple of calculations that can help you make an informed decision on adjustments you should consider:  Compare the annual expense of a habit/item compared to an “essential” expense. (Example #26)  When assessing the carrying of debt be sure to compute and include the annual interest payment. How much you will spend just on interest in a year. (Example #32) Copyright © 2008 Pearson Education, Inc. Slide 4-5