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Budget: How To Budget Your Money?
Budget: How To Budget Your Money?
Budget: How To Budget Your Money?
The average person spends money three times a day. $ A movie with popcorn and a soft drink can easily cost $20 $ Just one soft drink a day for .99c adds up to $361.35 in a year $ Whats the biggest expense item for teenagers? FOOD!
Money Matters:
How
many times a day do you spend money? The average person spends money 6 times a day. Money brings happiness Money problems bring unhappiness Money problems stay with you for the rest of your life. Top reason for divorce is financial. Finances affects everything else in your life.
more money Cut your expenses Wait and win the lottery system Have a budget
What is a budget?
A
tool to manage your money For a specific period of time usually monthly Budget due to our limited resources Helps us meet our responsibilities and our financial goals
Track spending
Money toward expenses/bills
Avoid careless spending Eliminates stress Live within your means/income
Without a Budget
Have no plan
Paycheck-to-paycheck Come up short Plan for emergencies No savings/investing plans
3. 4. 5. 6.
Decide on a time frame for tracking expenses (monthly) List all money you have coming in (income) A. Disposable income B. Discretionary income PYF (Pay yourself first) = Savings Make categories for all expenses Subtract total expenses from income Study budget and make changes
Budgeting Terms
Budget
Expenses:
Fixed expenses monthly contractual Variable expenses not contractual, vary each month Periodic fixed expenses
Decide if each item is income, a fixed expense, variable expense or periodic expense
Fixed expense
Wages
Income
Variable expense
Internet bill
Fixed expense
Income
Utilities
Variable expense
Income
Savings
Fixed expense
Eating out/Snacks
Variable expense
Income
Expenses
There is not one correct control system. Depends upon the individual/family
Envelope systems individuals place the actual budget amount of cash from a paycheck into a specific envelope system for the expense Check register system helps consumers to track all expenditures in a checkbook register which has been divided into spending plan categories Electronic spending plan systems multiple types of software are available for consumers to use to help keep track of their financial records like www.mint.com
A net worth statement describes an individual or familys overall financial condition on a specified date The components include:
Assets Everything a person owns with monetary value Liabilities Debts or what is owed to others Net worth - The amount of money left when liabilities are subtracted from assets (indicates wealth)
Assets
Liabilities
Net Worth
ANY QUESTIONS?