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Budgeting

Budgeting. What Is A Budget. A BUDGET is a plan for managing money during a given period of time INCOME is the amount of money you are making and bringing home. How to Improve Y our F inancial S ituation. Play the lottery and hope for a miracle?

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Budgeting

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  1. Budgeting

  2. What Is A Budget • A BUDGET is a plan for managing money during a given period of time • INCOME is the amount of money you are making and bringing home

  3. How to Improve Your Financial Situation • Play the lottery and hope for a miracle? • Quit your job and hope to find a better paying one? • Get more than one job? • Have a budget?

  4. Some Interesting Facts • If you buy one Den Pop a day at $0.75, that add ups to $273.75 a year • The biggest expense among adolescents is FOOD • The average person spends money at least 3 times a day • Number one reason for divorce is because of financial problems

  5. Benefits of Budgeting • It can help you to save up for your important goals • It can eliminate stress • It will help you live within your means • It forces you to evaluate and modify your spending patterns • It puts you in control of your financial spending

  6. Life Without a Budget • Spending with no plan • Coming up short each month • Living paycheck-to-paycheck • No plan for emergency situations • No savings or investing plans • Less likely to know what money you actually have to spend and what you need to keep

  7. Average Family Spending Percentage • The typical family spends their money in these areas: • Housing- 30% • Transportation- 20% • Food- 15% • Utilities/ Home Improvement- 15% • Savings- 10% • Insurance- 6% • Other- 4%

  8. How To Build a Budget • Come up with a time frame for tracking your expenses (weekly, monthly, etc.) • Add up all the money you have coming in (Income) • Saving Account • Put money away for yourself first before spending • Categorize your spending (food, bills, gas, saving, extra) • Add up all money you are spending and saving and subtract that from your income

  9. How To Build a Budget • Study Budget • You should never spend more than you have • Having trouble keeping your money separate? • Make envelopes for each category expense you have (bills, food, gas, etc) and when the money runs out of that envelope then the expenses for that category are out

  10. Expenses • Fixed Expenses- items that have monthly contractual obligations • Variable Expense- obligations that are not contractual (vary each month)

  11. Spending Identification Activity • Decide whether each of the following are Fixed Expenses or Variable Expenses

  12. Spending Identification Activity • Groceries? Variable Expense • Car Registration? Fixed Expense

  13. Spending Identification Activity • Internet Bill? • Fixed Expense • Eating Out/Snacks? • Variable Expense

  14. Spending Identification Activity • Utilities? • Fixed Expense • Savings? Fixed Expense

  15. Questions???

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