Presentation on theme: "Personal Finance Budgeting-Chp. 6 Day 11. Step 3: Preparing a Budget Worksheet Budget worksheet-a planning document on which you record your expected."— Presentation transcript:
Step 3: Preparing a Budget Worksheet Budget worksheet-a planning document on which you record your expected and actual income and spending over a short time, usually one month.
Preparing a Budget Worksheet Step 1: Create a Worksheet. List sources of income and categories of spending and saving. Record the amounts you expect to receive, spend, or save during the month. Record the amounts you actually receive, spend, or save. Record the difference.
Preparing a Budget Worksheet Step 2: Estimate Your Income Use net income from your paycheck stubs. Estimate uneven income. Be sure the income is real.
Preparing a Budget Worksheet Step 3: Estimate Your Expenses and Savings List your fixed and flexible expenses. Plan for uneven expenses. Plan your saving. Total Expected Income-Total Expected Expenses and Savings = Zero
Preparing a Budget Worksheet Step 4: Record Your Actual Income and Expenses At the end of the month, review your receipts and fill in what you actually had for income, expenses, and savings.
Preparing a Budget Worksheet Step 5: Calculate the Difference Actual amount-expected amount + received more than or spent less than you expected in that category – received less than or spent more than you expected in that category
Budget Pitfalls Some people get too detailed or too specific. Some people don’t predict the correct amount of their flexible expenses. Some people lump too many expenses under miscellaneous. Some people give up on budgets because they think it takes too much time and effort to create and maintain them.
Step 4: Review and Adjust Your Budget Worksheet Evaluate what your budget tells you. Adjust your spending. Change your future spending to match the expected spending on your budget worksheet. OR Adjust your expected budget worksheet to make a new plan. Make several plans.
Step 5: Create Your Budget for the Year A summary of all your budget worksheets for 12 months. Helps you plan steps toward major goals that may take many years to achieve.
Step 5: Create Your Budget for the Year See example budget p. 208. Total Income = Expenses + Saving Relate your goals to your budget. Adjust to changing goals.
Step 5: Create Your Budget for the Year Family Budget The way one family member spends often affects others. Plan together. Compromise.
Assignments Creating Your Own Budget worksheet Due tomorrow