Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved1 Introduction Do you know what is great about being young? You have more than enough time to achieve financial independence. Waiting to begin saving can dramatically decrease your chances of becoming financially independent. Knowing what a budget is, how to create one and how to maintain one is essential to your financial wellbeing. Using a budget that is not current and accurate may decrease your chances of becoming financially successful.

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved2 Objectives Explain why a budget must be current, accurate and flexible Identify how much you should have in emergency savings Discuss what you might use long-term savings for Demonstrate why it is important to always account for inflation Identify what using budgeting software should never do Explain how you will know your budget is working Describe how often you should update your budget Define inflation and other key budget terms Describe what emergency savings are used for You should be able to do the following after completing this lesson

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Budget Maintenance What budget maintenance consists of Why budget maintenance is necessary Why most people need and use a budget How long you should have and use a budget In this section, you will learn

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Emergency Savings What the term “savings” means What an unexpected expense is What emergency savings are and what they are used for Ways to determine how much emergency savings are needed In this section, you will learn What you should do with excess emergency savings Emergency Savings Example You will run the following Interactive Example

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Additional Savings What savings, in addition to emergency savings, you will need What retirement savings are and what they are used for How the amount of these additional savings compares to emergency savings What factors affect how much retirement savings are needed In this section, you will learn Why everyone should estimate how much retirement savings they will need What long-term savings are and what they are used for College Savings Exercise You will run the following Interactive Exercise

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Annual Inflation What inflation is What the rate of inflation is What the average rate of inflation is Why a low rate of inflation can be both good and bad In this section, you will learn Who has the ability to control the rate of inflation Budget Inflation Example You will run the following Interactive Example

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Adjusting Your Budget What inflation does to the cost of the goods and services How inflation affects the amount of money you spend Why it is important to account for inflation each year Whether spending increases each year by the rate of inflation in all budget categories In this section, you will learn

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Budgeting Software The advantages of using budgeting software How much of creating and using a budget is psychological How much of creating and using a budget is manual labor Useful things budgeting software can help you do In this section, you will learn The disadvantages of using budgeting software

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved – Monitoring Your Budget Why a budget is considered dynamic rather than static When you should review and update your budget The benefits of having and using a good budget What the term “living within your means” actually means Why it is important for a budget to be both current and accurate In this section, you will learn

Lesson 7.3 Maintaining a Budget July 2011Copyright © … REMTECH, inc … All Rights Reserved10 Discussion Questions Everyone encourages young people to save money for their retirement, but how do you know how much money you will need when you retire? Is it possible to reach a point where you cannot physically save enough money to continue your current lifestyle during retirement?