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2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School.

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Presentation on theme: "2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School."— Presentation transcript:

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2 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Meet Evan Paid once per month Puts enough money in his checking account to cover his expenses for the month He runs out of money each month before all of his expenses are paid

3 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Evan created a list of all of his expenses First allocates money to his savings account Estimates that his remaining expenses will be no more than $1000/month: But he runs out of money before the end of each month How does Evan think he is spending his money? ExpenseAmount Rent and Utilities$500 Health insurance$100 Renter’s Insurance$10 Car insurance$40 Gas$100 Groceries$100 Cell phone$70 Personal care$30 Entertainment$50 Total$1000

4 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 3 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Evan wasn’t accounting for $62.00 per month! Are you sure there isn’t anything else you spend your money on, Evan? Well… I do purchase a cup of drip coffee almost every morning but that is only $1.00! And I usually eat lunch at a restaurant about once per week… but I didn’t think that added up to much money. $1.00/ day $30/ month $365/ year Lunch at $8.00/ week $32/ month $416/ year

5 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 4 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Create an Income and Expense Statement for Evan for the month of March Help Evan Create an Income and Expense Statement Gross Income$ Federal Income Tax $ Social Security$99.20 Medicare$23.20 Net Income$ Evan has summarized the information from his March paycheck This is Evan’s only source of income

6 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 5 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Used an app on his smartphone to track his expenses Evan’s Expenses 3/1 – Automatic transfer to savings account $ /1 – $400 check for rent payment 3/1 – Health insurance $100 3/2 – Withdrew $20 in cash to purchase daily coffee 3/3 – Lunch $6.50 3/3 - Hockey game admission - $10 3/5 – Purchased gas for $40 3/6 – Movie theater ticket $7.50 3/7 – Groceries $52

7 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 6 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Evan’s Expenses 3/10 – Lunch $8 3/12 – Basketball game admission $15 3/15 – Cell phone payment $70 3/15 – Car insurance payment $40 3/15 – Renter’s insurance payment $10 3/16 – Haircut $15 3/17 – Purchased gas for $40 3/20 – Lunch $7.50 3/25 – Bowling with friends $15 3/27 – Groceries $38 3/27 – Concert ticket - $45 3/28 – Purchased gas for $40 3/31 – Electricity payment $50 3/31 – Water payment $50

8 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 7 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Evan’s Income and Expense Statement Net Loss -$57.42 Customize Evan’s statement by removing the categories and sub-categories that you believe he doesn’t need Income and Expense Statement for:Evan Time Period:March Amount Income Earned Income Wages or salary before deductions Total Income $1, Expenses Deductions Often Taken from Paychecks Federal Income Tax Social Security (FICA)99.20 Medicare23.20 Saving and Investing (Pay Yourself First) Contribution to savings and investments Insurance Premiums Health insurance, Medicaid and Medicare Renters or homeowners insurance10.00 Auto insurance40.00 Housing Costs Housing payment (rent or mortgage) Utilities (gas, electricity, water, garbage) Transportation Costs Fuel (gasoline/diesel) Food Costs Food at the grocery store90.00 Meals at restaurants22.00 Snacks away from home (coffees, treats)20.00 Communication and Computers Cell phone70.00 Clothing and Personal Care Personal care (shampoo, haircuts, cosmetics)15.00 Entertainment Movies, books, and other entertainment92.50 Total Expenses$1, Net Gain or Net Loss (Income less Expenses)-$57.42

9 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 8 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona According to Evan’s Income and Expense Statement, he has a net loss. What could he do to change his net loss to a net gain? What changes did you make to give him a net gain? Discussion

10 2.2.4.G1 © Take Charge Today – August 2013 – Income and Expense Statement – Slide 9 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona Were Evan’s mental calculations accurate? What does this say regarding only thinking about your finances versus writing the information down? How has creating an Income and Expense Statement helped Evan manage his money? Discussion ExpenseAmount Rent and Utilities$500 Health insurance$100 Renter’s Insurance$10 Car insurance$40 Gas$100 Groceries$100 Cell phone$70 Personal care$30 Entertainment$50 Total$1000


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