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 A budget is a written record of the money that flows in and out of your household or pocket every month.

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Presentation on theme: " A budget is a written record of the money that flows in and out of your household or pocket every month."— Presentation transcript:

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2  A budget is a written record of the money that flows in and out of your household or pocket every month.

3  Budgeting is the first step on the road to financial success.  Controlling your day to day finances allows you to do the things you want to do.

4  A balanced budget is when your expenses do not exceed your income.  Start budgeting now – don’t wait until you’re financially “on your feet”, to begin to budget  A budget is nothing more than the activity of balancing income vs. expenses.

5  If you haven’t budgeted before, or feel at this point don’t have a good idea of where your money is going...  For the next month, write down EVERYTHING you spend money on and anytime you receive money.

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7  Track your expenses  Figure out the amount of money you’re spending  What do you have to spend?  What are you spending that is not a necessity?

8  Essential expenses – HAVE to have in order to live  Non-essential expenses –DON’T HAVE to have in order to live

9  Fixed expenses are expenses that are the same from month to month.  Mortgage or rent  Insurance – auto & home  Car payments  Taxes  School loans

10  Variable expenses change from month to month.  Car maintenance  Gas  Food  Electricity, heat  Phone

11  Non-essential expenses are not necessities.  Clothing (new)  Books  Movies  Video games  Other items, you want, but don’t need

12  At the end of the month, break everything down into categories.  Is your income greater than your expenses?  YES! – Great, then you can save.  NO! – There’s a problem!

13  What can you cut out?  Eating out too often?  Buying things you don’t need?

14  Pay yourself first!  Use automatic transfers  Use payroll deduction  Take advantage of your =employer’s retirement plan

15  A quick and easy way to save a little money is to toss your spare change into a jar or piggy bank!

16  Negative Attitude  Lack of motivation  Unrealistic expectations  Lazy  Not consistent with completing daily/weekly  Too many wants!

17  Identify and write down your financial goals.  Financial goals may be:  Vacation  College  New car  Down payment for a house  Paying off credit card debts

18  Short term – less than 1 year  Mid term – 1 to 3 years  Long term – 3 years or more

19  Specific – what is the goal?  How much should I save?  How long will it take me?  Realistic – you can reach it with your resources (time/money)

20  Goal: pay off $1500 credit card balance (12% interest)  When: within 12 months  How much? $134 per month  Is that realistic?

21  Goal: $5,000 trip to Europe Summer 2015  When: in 18 months  How much? $278 per month  Is that realistic?  Are you making any money by saving in a savings account?

22  Goal: $15,000 for a down payment on a home  When: in 5 years (60 months)  How much? $250 per month  Is that realistic?

23  In most cases, you can take the amount you want to save and divide by the number of months.  Save for $1,000/12months = need to save $84 each month  If you misuse credit cards and make monthly payments then you will need to pay off quickly, including extra payments  If you want to pay off credit cards or loans which include interest, visit servicecu.org and use the financial calculators.


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