Budgeting Overview Presented by: Leslie Maestas LANL Business Manager Science, Technology & Engineering

Outline What is budgeting Budgeting Basics Building a Budget Basic Budget Worksheet

What is budgeting What a budget IS NOT ◦ A mechanism to restrict spending ◦ Intended to “restrict” what you can spend your money on (cut out fun stuff) What IS a budget? ◦ A mechanism for understanding how much money you have ◦ Understanding where your money goes ◦ Planning how you want to use your money

Budgeting Basics What is a budget As defined by Merriam-Webster: a : a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them b : a plan for the coordination of resources and expenditures c : the amount of money that is available for, required for, or assigned to a particular purpose

Budgeting Basics – Tracking Income The first and easiest step is to determine how much income you have. Typically just get this off your pay stub (and your spouses). If you have other income, be sure and include that as well

Budgeting Basics – Tracking Expenses There are three types of expenses SAVINGS Regular Fixed Expenses ◦ Mortgage/Rent ◦ Car Payments ◦ Insurance ◦ Family Obligations (Child Support/Alimony; Day Care; Babysitting) Variable/Non-Discretionary Expenses ◦ Utilities (electric, water, gas, phones) ◦ Food (groceries) ◦ Health & Medical (out of pocket) ◦ Transportation (gas, oil changes, auto repairs) ◦ Debt Payments (credit cards, student loans) ◦ Pets (food; grooming)

Budgeting Basics – Tracking Expenses (con’t) Variable/Discretionary Expenses ◦ Utilities (cell phones, internet, cable) ◦ Food (eating out, starbucks) ◦ Health & Medical (fitness memberships) ◦ Entertainment/Recreation (hobbies, subscriptions, vacations) ◦ Clothing/Makeup/Personal Care ◦ Other (gifts, donations, school supplies, toys)

Budgeting Basics – Bottom Line Subtract your expenses from your income Are you making more than you spend – or spending more than you make? If you are overspending, you should be able to more easily identify why/where and address appropriately – you can adjust spending/saving to improve situation. A few adjustments may make a big difference

Building a Budget Sounds hard – how do I do it? Find the approach that works for you: ◦ Work backwards – what have you spent $$ on the past few months – record EVERYTHING coffee, $20 cash machine ◦ Use no cash/only a credit card for a month or two (pay it off each month) – most credit card companies provide detail reports of costs

Basic Budget Worksheet BudgetActualDifferenc e INCOME: Wages Other Subtotal Income EXPENSES: SAVINGS Fixed Expenses Mortgage/Rent Car Payments Insurance Fixed Family Obligations Subtotal Fixed Expenses

Basic Budget Worksheet (con’t) BudgetActualDifferenc e Non-Discretionary Expenses Utilities Food Health/Medical Transportation Debt Payments Pets Subtotal Non-Discretionary Expenses

Basic Budget Worksheet (con’t) BudgetActualDifferenc e Discretionary Expenses Utilities Food Health/Medical Entertainment/Recreation Clothing/Makeup Other Subtotal Discretionary Expenses TOTAL SAVINGS/EXPENSES NET INCOME/EXPENSE -- BALANCE

Things to keep in mind Pay yourself first ◦ Determine how much you need to put aside in savings. Consciously separate wants from needs Money spent on a credit card is still money spent – ask yourself – would you pay cash?

Leslie Maestas-Bio Leslie Maestas is currently a Business Manager at Los Alamos National Laboratory where she support the Principal Associate Director for Science, Technology & Engineering. Leslie has a wide range of financial experience with programmatic, division, and indirect budgets within the Laboratory as well as auditing external to LANL. Leslie worked at the Laboratory in Accounting as a summer student before going to work as an auditor with Peat Marwick in Albuquerque for 3 years. She returned full-time to the Laboratory in 1989 and has since served in a variety of financial positions with increasing responsibility. Leslie has a Bachelor of Accountancy degree from New Mexico State University and a Master of Business Administration from College of Santa Fe. She is also a Certified Public Accountant.