Presentation on theme: "How will you use your money?"— Presentation transcript:
1 How will you use your money? BudgetingHow will you use your money?
2 Choose Financial Goals A budget is a plan for dividing up your income among spending and saving options.Short-Term Goals are things you hope to achieve within the next year or two.Example – you might want to visit a friend who moved away last summer.Long-Tem Goals are things you hope to achieve in more than a year or two.Example – your career choice.
3 Prioritizing Your Goals Short term goals lead to long term goalsYou need a clear understanding of your goalsRank them from most important to least important.
4 Your Goals Affect Others How can your goals affect your family?How can your goals affect your community?
5 Questions What is a budget? What is the difference between short-term goals and long-term goals?How can short-term goals lead to achieving long term goals?Why should you prioritize your goals?
6 Track Income and Expenses Keep Financial RecordsTrack your incomeTrack your expensesEstablish a Filing SystemEffective Record KeepingReceiptsChecks
7 Fixed and Flexible Expenses Fixed expenses are amounts you have already committed to spend.You have no choiceCar paymentMonthly rentCar insuranceFlexible Expenses are amounts that you can choose to spend or not to spend.ClothesLuxury GoodsGoods that have a special qualities that make them more expensive than alternative goods.
8 QuestionsWhat is the purpose of keeping financial records?What income records should you keep?What spending records should you keep?Describe how to set up an effective filing system?What is the difference between fixed and flexible expenses?
9 Your Budget WorksheetA budget worksheet is a planning document on which you record your expected and actual income and spending over a short time, usually one month.Step 1: Create a Worksheet
10 Create Your Budget Worksheet Step 2: Estimate Your IncomeEstimate Uneven IncomeBonus MonthBirthdaysBe sure income is realStep 3: Estimate your Savings and ExpensesPlan for Uneven ExpensesPlan your savings
11 Create Your Budget Worksheet Step 4: Record Your Actual Income and ExpensesStep 5: Calculate the Differences
12 Budget PitfallsSome people get too specific, the level of detail becomes too much trouble.Some people don’t predict the correct amount of their flexible expenses.Some people lump too many expenses under miscellaneous.Give up because of Too much time. One hour a week.
13 Create Your Budget for the Year Evaluate Your Budget WorksheetAdjust Your SpendingMake Several PlansRelate Your Goals to Your BudgetAdjust to Changing Goals
15 QuestionsWhy must your budget balanceWhat can you do to adjust your budget if it doesn't balance?Why should you review your budget at least once a year?What are the benefits of planning a family budget?
16 QuestionsWhat is the value of compromising as your plan with your family?How can budget worksheets help you create a budget for the year?How should you decide what uneven income flows to include in your budget?
17 Questions What is the purpose of a budget? How does preparing a budget worksheet involve trade offs?What are the steps in preparing a budget worksheet?What would you use to prepare a worksheet?What does the over or under column on the worksheet tell us?