1. Introduction to Business and Technology
Budgeting and Finance
Introduction to Business and Technology

2. Describe situations that may occur as a result of poor budgeting.
Bell Ringer:
Describe situations that may occur as a result of poor budgeting.
Be prepared to share your answers with the class

3. GPS Focus Standards
BCS-BE-26: The student explains the process in developing a budget.
BCS-BE-27: The student analyzes the financial statements of a business and utilizes those statements to make important business decisions.
BCS-BE-28: The student identifies financial aspects associated with opening a business.
BCS-BE-29: The student completes records which are fundamental for any business.

4. Essentials Questions How can a budget increase your profits?
What documents do you need to make wise decisions concerning the financial health of your business?
How much does it cost to open a business? from where do those numbers come?
Why are your bank records and credit report so important?
How do you maintain a good credit score?

5. Budgeting Techniques Lesson Objectives:
Identify the purpose of a budget
Describe steps for preparing a
budget
Describe characteristics of a
successful budget

6. Budget
A plan for managing income and expenses over a certain period of time.

7. Purpose of Budgets Live within your income.
Make wise buying decisions.
Avoid credit problems.
Plan for financial emergencies.
Develop money management
skills
Achieve your financial goals.

8. The Budget Process Set Financial goals - What do you want to achieve?
Plan Budget Categories
Maintain financial records
Evaluate your budget

9. 1. Set Financial GOALS: (Affect what we spend our $$ on!)
Short-Term Goals
Long-Term Goals
SMART Approach

10. SMART Approach

11. SMART Goal Example
I will save $100/month for 18 months from my part-time job to purchase a car by July 31, 2014.
Specific-purchase a car
Measurable-$100/month
Action-oriented-I will save
Realistic-from my part-time job
Time-based-July 31, 2014

12. 2. Plan Budget Categories
Income
Paycheck
Allowance
Scholarships
Borrowed Money
Revenue
Savings
Expenses
Needs
Wants

13. Two Types of Expenses
Fixed
Variable

14. Fixed Expenses Rent Mortgage payments Insurance premiums
Costs that occur on a regular basis and are the same amount each time
Rent
Mortgage payments
Insurance premiums

15. Variable Expenses Food Clothing
Costs that differ each time and may not be as easy to estimate
Food
Clothing
Utilities i.e., telephone, electricity, water

16. Personal Budget Categories
Savings
Food
Clothing
Household
Transportation
Health and personal care
Recreation and Education
Gifts and contributions

17. Allowance
The amount of money you plan to use for a certain budget category

18. 3. Maintain financial records
Record income and expense
checkbooks, bank statement
Prepare an income and expense
summary
spreadsheets, budgeting
software

19. 4. Evaluate Your Budget
Budget variance - difference between actual spending and budgeted amount
Deficit - Actual spending is greater than budgeted amount
Surplus - Actual spending is less than budgeted amount

20. Characteristics of an Effective Budget
Realistic – reflect current
income and planned spending
Flexible – adaptable to
unexpected expenses
Regular evaluation – every few
months
Well planned and clearly
communicated – involve all family
members
Simple format – user friendly

21. Review Questions Which of the following is an example of a fixed cost?
clothing
accessories
car payment
entertainment

22. Review Questions
2. Which of the follow is an example of a variable cost?
rent
insurance premiums
water bill
mortgage payment

23. Review Questions A major purpose of a budget is to:
assist with comparison shopping
achieve financial goals
reduce a person’s enjoyment of life
d. gather data for using credit cards

24. Review Questions
4.The most uncertain aspect of the budgeting process involves:
estimating variable expense
determining net worth
estimating fixed expense
d. setting financial goals

25. Review Questions
5.The following is a characteristic of an effective budget:
should be written in ink
limited to one page
should not change
d. should be evaluated regularly