1. Preparing a Budget

2. Budgeting Managing one’s income and expenses by creating a plan  Companies, Governments, Families, You Covers a specific time  Companies typically year  Families & Individuals often a month 1 format – 3 columns  Income/Expenses, Estimated, Actual

3. 4 Steps Estimate Your Income Estimate Your Expenses Follow Your Budget Adjust Your Budget

4. Estimating Your Income All the money you will make  Wages, salaries, tips commissions, student loans Have to know what you have so you know what to spend

5. Estimate Your Expenses How you will spend your income Short-term savings Long-term savings Fixed Expenses Variable Expenses

6. Short-Term Savings Savings – money you keep for the future Short-term goals  Vacation, pair of shoes, computer

7. Long-Term Savings Long-term goals – house, car, college Amount from each check  Grow to good amount in few years Expenses you do not expect  Car breaks down, lose your job Budget not complete without savings  At least 10% of income Retirement

8. Fixed Expenses Expenses that are same every month Rent, car payment, utilities Some fixed come few times a year (periodic expenses)

9. Variable Expenses May also hear flexible expenses Change from month to month  Clothing, movies, gifts, eating Expense record – chart showing where you spend your money  Learn that you spend more than you thought Prioritize expenses – decide which things are most important  Buy less of something, bring your lunch instead of buying

10. Follow Your Budget Keep expense record each week Make sure spending is following budget Look at records often and before you spend money Keep track of all expenses  Place in actual column on budget sheet

11. Adjust Your Budget Adjust = make small changes Why adjust?  Less income than thought, more expenses, work fewer hours Stick to new budget  Try for month  Is it working?  Happy with spending habits?

12. Tips & Advice Live within your means  Don’t have to keep up with the Joneses Build a safety net Pay Yourself First Track, monitor, and be disciplined