Budgeting September 13, 2010

1. Budgeting September 13, 2010 Bus 12 – Money Matters R. Okumoto

2. Topics Today • What is Budgeting ? • What is Financial Planning ? • How do you Measure your Financial Health ? • How do you keep track of Paperwork ? • What are the Basic Money Math Formulas ? Bus 12 – Money Matters R. Okumoto

3. What is Budgeting ? • Budgeting = Short term forecast of income & spending (monthly or weekly) • Financial Planning = Long term forecast of income & spending (Multiple Years) (Typically includes savings & investment planning) (Typically includes major life event planning: marriage, kids, homes, retirement) Bus 12 – Money Matters R. Okumoto

4. What is Financial Planning ? • Budgeting = Short term forecast of income & spending (monthly or weekly) • Financial Planning = Long term forecast of income & spending (Multiple Years) (Typically includes savings & investment planning) (Typically includes major life event planning: marriage, kids, homes, retirement) Bus 12 – Money Matters R. Okumoto

5. Who Budgets? - Government Bus 12 – Money Matters R. Okumoto

6. Who Budgets? - Business Bus 12 – Money Matters R. Okumoto

7. Who Budgets? - Schools Bus 12 – Money Matters R. Okumoto

8. Who Budgets? - Movies Bus 12 – Money Matters R. Okumoto

9. Who Budgets? - YOU Bus 12 – Money Matters R. Okumoto

10. So…Why Budget ? • Budgeting enables you to manage your money • Budgeting structures your spending • Budgeting provides a structure to analyze your spending • Budgeting is a tool to help you achieve your financial goals • It also serves as a back up in case something happens to you Bus 12 – Money Matters R. Okumoto

11. So…Why Budget ? • Budgeting enables you to manage your money • Budgeting structures your spending • Budgeting provides a structure to analyze your spending • Budgeting is a tool to help you achieve your financial goals • It also serves as a back up in case something happens to you Bus 12 – Money Matters R. Okumoto

12. So…Why Budget ? • Budgeting enables you to manage your money • Budgeting structures your spending • Budgeting provides a structure to analyze your spending • Budgeting is a tool to help you achieve your financial goals • It also serves as a back up in case something happens to you Bus 12 – Money Matters R. Okumoto

13. So…Why Budget ? • Budgeting enables you to manage your money • Budgeting structures your spending • Budgeting provides a structure to analyze your spending • Budgeting is a tool to help you achieve your financial goals • It also serves as a back up in case something happens to you Bus 12 – Money Matters R. Okumoto

14. So…Why Budget ? • Budgeting enables you to manage your money • Budgeting structures your spending • Budgeting provides a structure to analyze your spending • Budgeting is a tool to help you achieve your financial goals • It also serves as a back up in case something happens to you Bus 12 – Money Matters R. Okumoto

15. Why do all this? • To ensure that: • You will incur minimal Financial Crises • You will likely survive any Financial Crises Bus 12 – Money Matters R. Okumoto

16. How to Budget (The Process) 2 • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

17. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

18. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

19. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

20. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

21. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

22. How to Budget (The Process) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

23. How to Budget (The Process) 3 • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

24. How to Budget (The Process) • Use free tools and assistance • Quicken Online - Recently became free of charge. Tracks your spending and categorizes it automatically. • SimpleD - An “open source Windows application designed for personal or household financial management.” The screenshots actually look pretty slick. • AceMoney Lite - Freeware version of an offline personal finance management program. It even downloads stock quotes from the internet. • PearBudget - An Excel spreadsheet that has definitely had a lot of time put into it. It’s a bit busy. Bus 12 – Money Matters R. Okumoto

25. How to Budget (The Process) • Use free tools and assistance • Buddi - An open-source personal finance and budgeting program, which will run on any machine with Java installed. • Mo.neytrack.in - A “free online webapp that allows you to track all your expenses and income.” • Grisbi - Another offline open-source personal finance app. • Budget Master - A free personal budgeting program that offers charts and visual reports • Microsoft Office Accounting Express 2007 - Seems targeted at business, so this may be overkill for home budgets. But it’s free! Bus 12 – Money Matters R. Okumoto

26. How to Budget (Example) Bus 12 – Money Matters R. Okumoto

27. How to Budget (Example) Bus 12 – Money Matters R. Okumoto

28. How to Budget (Example) Bus 12 – Money Matters R. Okumoto

29. How to Budget (Example) Bus 12 – Money Matters R. Okumoto

30. Savings • What is Savings or Cash Surplus? (BMM – When Income is greater than Expenses) Bus 12 – Money Matters R. Okumoto

31. How to Budget (Process Review) • Start with a Goal • Build the Plan • Track Spending – start with Major items • Categorize Spending • Pay yourself First • Be Flexible • Use free tools and assistance • Review and improve: trial & error Bus 12 – Money Matters R. Okumoto

32. How to Measure your Financial Health(Personal Wealth) 4 • The Equation of Personal Net Worth: (BMM) (Assets – Debt = Personal Net Worth) Bus 12 – Money Matters R. Okumoto

33. How to Measure your Wealth Net Worth Mr. “All for Show” Bus 12 – Money Matters R. Okumoto

34. How to Measure your Wealth Net Worth Ms. “Millionaire” Bus 12 – Money Matters R. Okumoto

35. Topics Today • What is Budgeting ? • What is Financial Planning ? • How do you Measure your Financial Health ? • How do you keep track of Paperwork ? • What are the Basic Money Math Formulas ? Bus 12 – Money Matters R. Okumoto