1. Financial Planning

2. Budget A spending plan Set for a given period of time Prepared for a specific amount of money

3. What is the difficulty in budgeting? Self Control!

4. To begin a budget…. You must have INCOME money received from doing work. You must know your EXPENSES things on which you must spend your money.

5. Two Types of Expenses: FIXED – expenses that are repeated with the same amount each time they are paid. Examples: rent, mortgage, car payment, insurance VARIABLE – expenses that fluctuate in amount, each time they are paid. Examples: Texas electricity bill, water bill

6. So….. To make a budget you would take your income minus your expenses. INCOME – EXPENSES = BUDGET BUT WAIT!!!!!!!!!!

7. Your annual salary (GA) Gross Annual – is the amount you are contracted to earn per year. $24,000 You must figure out how much that is a month. This is number is called your (GM) Gross Monthly $24,000 / 12 = $2000

8. Uncle Sam gets his $$$ 1 st This amount comes directly out of your paycheck. Your GM minus taxes (27%) is your (NM) NET MONTHLY your take-home pay $2000 x 27% = $540 (taxes) $2000 - $540 = $1460 NM

9. Start your monthly budget $1460 (NM) – expenses Expenses are given a % of NM Housing * Food * Transportation Clothing * Saving * Recreation Medical * Personal Other

10. Expenses Housing – (fixed) usually the largest percentage in a budget. Get room-mate(s) to split costs. ***Housing category CANNOT be more than 40% of salary*** Food – (variable) decide how you like to eat…..steak or ramen? Do you eat a special diet? Could be as low a 8% for women. Clothing – (variable) do you wear a uniform to work? Or have to buy/wear suits? Wear out your shoes? Like to shop?

11. Transportation – (fixed or variable) walk, ride bus, drive car, carpool? Good advise….pay off your car if you can. *car payment *insurance *oil changes/ repairs/ state inspections *gasoline Savings – (fixed) DO IT!!! Start early, stay consistent.

12. Recreation – (variable) higher for singles. Dating - wine & dine or blockbuster night? *fitness club *weekend fun *vacations Medical – (variable) regular prescriptions, co-pay for sick visit to doctor, get-well meds. Personal – (variable) cosmetics, hair, nails, gifts, personal hygiene products. Pay yourself!!!

13. Figuring out the budget If you know the money amount and need to find the percentage amount: NM/$=% $1460 (NM) / $475 (housing) = 32.5% (round up = 33%)

14. Ready To Make Your Own Budget?