1. Chapter 3 Making a Budget

2. As you become more independent a is important for happiness and success As you become more independent a is important for happiness and success

3. Choosing financial goals You must do three things to choose financial goals You must do three things to choose financial goals 1. Decide on things you want to that require money. 2. Come up with a plan for. 3. Stick to the plan

4. Budgeting will help you manage your money so that you can meet and plan for long term. Budgeting will help you manage your money so that you can meet and plan for long term.

5. Developing a Budget A budget is a plan for keeping track of A budget is a plan for keeping track of (the money that comes in) and (the money that comes in) and (the money that is spent) (the money that is spent) In a good budget expenses are In a good budget expenses are income income

6. To prepare a budget you have to know two things To prepare a budget you have to know two things 1. Your. 2. Your.

7. Regular Expenses Food, clothing, housing are expenses that occur Food, clothing, housing are expenses that occur. When you live on your own you cannot avoid these. When you live on your own you cannot avoid these. What are some specific example of regular expenses? What are some specific example of regular expenses?

8. Some regular expenses cost the same amount each month. These are called. Some regular expenses cost the same amount each month. These are called. What are some examples of fixed expenses? What are some examples of fixed expenses?

9. Other regular costs can. Other regular costs can. These are called expenses These are called expenses

10. Discretionary Expenses Things you can do without are called Things you can do without are called expenses expenses What are some examples of discretionary expenses? What are some examples of discretionary expenses?

11. Other Expenses expenses, expenses that come less often expenses, expenses that come less often Car insurance, gym membership Car insurance, gym membership expenses expenses Medical bills, car repairs Medical bills, car repairs You need to have money set aside for theses expenses You need to have money set aside for theses expenses

12. On average people spend about On average people spend about 1. 32% on housing 2. 13% on food 3. 5% on clothing 4. 5% on healthcare 5. About 5% on entertainment Other Costs you may incur 6. Up to about 20% on transportation 7. Utilities 8. About 7% for savings

13. Living with a Budget You should consider a budget for fixed expenses such as housing, cable, transportation You should consider a budget for fixed expenses such as housing, cable, transportation You should consider an (yearly) budget for long term expenses such as car insurance, and memberships You should consider an (yearly) budget for long term expenses such as car insurance, and memberships

14. Sticking to a budget can throw off your budget quickly. can throw off your budget quickly. To stick to you budget here are some ideas To stick to you budget here are some ideas Keep an expense book to track your spending Keep an expense book to track your spending If you go over one month reduce discretionary expenses the next month If you go over one month reduce discretionary expenses the next month Post your long and short term goals somewhere you will see them to keep you focused Post your long and short term goals somewhere you will see them to keep you focused Don’t carry around a lot of cash Don’t carry around a lot of cash Don’t impulse buy Don’t impulse buy

15. Revising your budget Sometimes you will have to revise your budget Sometimes you will have to revise your budget If you. If you. Income has. Income has. Expenses. Expenses.

16. If you need to reduce your expenses follow these steps If you need to reduce your expenses follow these steps 1. Reduce expenses 2. Reduce expenses 3. Reduce expense For example get a roommate or move to a smaller house For example get a roommate or move to a smaller house

17. Ways to be frugal to where you have to go. to where you have to go. Make your. Make your. Buy in. Buy in. Buy brands Buy brands your purchases your purchases Find forms of entertainment Find forms of entertainment