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Bell Ringer

Learn how to create a personal budget and make informed financial decisions by understanding your income, expenses, savings goal, and balancing your budget effectively.

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Bell Ringer

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  1. Bell Ringer • Write down 3 things you know your parents spend money on each month.

  2. Managing Your Money Chapter 15, Section 1

  3. By the end of today’s lesson, you should be able to: • Apply the principles of money management to the preparation of a personal budget

  4. Budget • Budget: a plan for spending and saving money • 3 Parts: 1. Income: amount of money you receive each month 2. Expenditures: money spent 3. Savings Goal

  5. Step 1: Determine Your Monthly Income • Earned Income: Pay that people receive for their work (Wages, Commission, Salary, Bonus) • Fringe Benefits: Indirect payments for work (medical insurance, sick leave, paid vacation days) • Interest Earned on Investments • Child Support • Social Security Benefits

  6. Step 1: Determine Your Monthly Income • Disposable Income: amount of money left over after taxes have been paid • You must subtract your total amount of income earned by the taxes that you pay to determine how much income you really have to spend.

  7. Step 2: Determine Your Monthly Expenditures • Fixed Expenses: expenses that are the same from month to month • House Payment/Rent • Loan Payments • Insurance Premiums

  8. Step 2: Determine Your Monthly Expenditures • Variable Expenses: Expenses that change from month to month • Heating Bills • Clothing Purchases • Entertainment Expenses

  9. Step 2: Determine Your Monthly Expenditures • Because resources such as money are scarce, you have to make choices involving trade offs, especially with variable expenses. • Your personal goals and values will shape your budget by determining what you do with your money. • Some examples of goals and values are: • Spend money on consumer goods • Planning to stay out of debt • Giving money to charity • Saving money for education

  10. Teens – Lesson 3 - Slide 3-Ca

  11. Teens – Lesson 3 - Slide 3-Cb

  12. Balanced Budget • To create a balanced budget, income must be greater than your expenditures. • If in the original budget, income is not greater, you can get another job that pays more, work more hours, or decrease expenses.

  13. Guided Practice • As the item appears on the screen, write it under the heading of Fixed Expense or Variable Expense, • Mortgage Payment • Dry cleaning bill • Car Payment • Newspaper Bill • Cost of Movies & Eating Out • Utility Bills

  14. Comprehension Check • What 2 major budget categories should people consider when planning a budget? • Income and Expenditures

  15. Comprehension Check • For a balanced budget, what must be greater – income or expenditures? • Income

  16. Comprehension Check • What type of expenses stay the same from month to month? • Fixed Expenses

  17. Comprehension Check • Give 2 examples of variable expenses?

  18. Comprehension Check • Is this an example of earned income? • Stock Dividends • Paid Sick Leave • Wages • Inheritance

  19. Comprehension Check • Is this an example of a fringe benefit paid by an employer? • Medical Insurance • Wages • Gifts • Savings Account Interest • Sick Leave • Commission • Salary • Paid Vacation Time

  20. Comprehension Check • What is an example of a personal plan for spending and saving? • Plan to be debt free • Donate money to a cause or organization (charity) • College Fund • Buy lots of things!!!

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