2. Module 1: Introduction to Money Management
Financial Literacy
Money Trek Project
Module 1: Introduction to Money Management

3. Money Management Manage your money Make informed financial decisions
Reach your financial goals
Provide tools for Budgeting

4. Objectives Track daily spending habits
Prepare a personal spending plan or budget to estimate monthly income and expenses
Identify ways to decrease spending and increase income
Identify budgeting tools that will help you manage your money
Right now, your money habits may not seem like a big deal. But habits can stick to you like glue. Good habits help you have self control as you plan to achieve your goals. Bad habits may push you out of the driver’s seat and lead you somewhere you really don’t want to go. The closer you get to being out on your own, the more you need to be in control of your actions.

5. Women, Money & Consequences
Typically…
Women earn less than men.
Women are caretakers.
Women are conservative investors.
Women outlive men.

6. What about Choices?
Men and women tend to choose different majors in college and to work in different occupations after college.
Women tend to work fewer hours, even when they work full time.
Women are more likely to leave the workforce or to work part time when they have young children.
Choices can account for some of the differences in salaries, but they aren’t the whole story.
Do you know where your money goes every month?
Many people don’t know how much money they leak each month.
How do you stop the leaks?
- Keep a personal spending diary.
A spending plan is:
A step-by-step guide for meeting expenses in a given period of time

7. Money Management
Budget
Plan for spending
and saving money

8. Financial Goals Be realistic Be specific Have a timeframe
State the action to be taken
Have milestones
Specific
Pinpoints something you want to achieve
Measurable
You can quantify how close you are to reaching the goal
Attainable
Within your resources/time frame
Relevant
Rewarding & important to your life
Time-bound
Trackable using milestones and schedules
Specific: I plan to save $10,000 for a down payment on a condo. (this is specific, but is it attainable for a college studeny).
Attainable: I plan to save $3,000 to rent my own apartment. (This is specific and more attainable).
Measureable: I’ll know how I’m doing because I’ll set up a separate savings account for this goal and I’ll know that I’m on track when I see that it is growing by $250/month.
Relevant: It is important to me to have a private place to live.
Timebound: I want to save $3,000 for an apartment of my own by the time I graduate. By June of my junior year, I will have saved $ By June of my senior year, I will have saved $3,000.
Think about where the money for tuition, books, room & board will come from.

9. Values What is the difference between a “need” and a “want”?
Do you know where you money goes each month?
To control your money:
Understand where your money goes
Keep a personal spending diary
Good place to discuss and record (on board or flip chart, etc.) needs and wants.
Needs are expenses that are absolutely necessary. Wants are optional. Some items are both a need and a want. For example, you need to eat, but you could pack a lunch instead of paying to eat out every day.

10. What is a Budget? An important step to financial security.
About choices – choosing how to make and spend money.
Knowing what your monthly income and expenses are.
A budget is an important step to financial security.
A budget is not punishment!
A budget is about making choices, about choosing how to earn & spend money & save for the future.
A budget plans for weekly, monthly and annual expenses, such as:
Weekly: food, transportation, entertainment, others?
Monthly: rent, utilities, car payments, others?
Annual/semi-annual: tuition, vacation, others?
A budget should address unexpected expenses, good and bad, such as:
An unexpected invitation to the movies or something else fun
A fender-bender
Others?

11. Determine Income and Expenses
Income–money that comes to you from:
Jobs
Allowances
Interest and dividends
Other sources
Expenses–items you spend money on:
Bills
Transportation expenses
Entertainment

12. Prepare a Spending Plan
Keep track of your daily spending
Determine your monthly income
Determine your monthly expenses
Find ways to decrease spending
Find ways to increase income
Do you know where your money goes every month?
Many people don’t know how much money they leak each month.
How do you stop the leaks?
- Keep a personal spending diary.
A spending plan is:
A step-by-step guide for meeting expenses in a given period of time

13. Activity 1: Spending Diary
Write down what you spend:
Typical day
Typical month
At the end of the month
Fixed expenses
Flexible expenses
Write down what you spend in a typical day.
Keep track of everything you spend for one month.
At the end of the month, sort spending into categories (rent, food, clothing, entertainment).

14. Calculate Income Income: Allowance Paycheck Miscellaneous Interest
Money from parents.
Wages from a job.
Miscellaneous work such as babysitting.
Interest and dividends from investments

15. Expenses Flexible Expenses Fixed Expenses Food Rent Utilities Clothing
Entertainment
Fixed Expenses
Rent
Car payment
Insurance

16. Activity 2: Monthly Income and Expense Worksheet
Create a monthly income and expense worksheet.
Once you know your income and expenses, you can create a realistic budget
Create a worksheet with your expected monthly income and expenses.
Once you know your income and expenses, you can create a realistic budget or personal spending plan.

17. Budget: Income & Expenses
Actual
Difference
Job #1 $
Job #2
Other
Total Monthly Income
Expenses
Fixed Regular Expenses
Rent
Car insurance
Car payment
Credit card
Fixed Irregular Expenses
Savings
Food
Utilities

18. Budget: Expenses (cont.)
Actual
Difference
Transportation
Bus fare $
Gas and oil
Parking and tolls
Repairs
Other
Medical expenses
Clothing
Entertainment
Household items
Personal items
Tuition
School expenses
Total Monthly Expenses

19. Increase Income You can increase income by: Part time job
Work additional hours
Negotiate your salary.
Move money to interest bearing savings accounts.
Chores
Gifts
Sell items on-line/yard sale.
You can increase income by: Seeking a part time job or work additional hours at your existing job.
Negotiating your salary.
Moving money from checking to
interest bearing savings accounts.
Selling items on-line or in a yard sale

20. Decrease Spending You can decrease spending by: Carry less cash
Control your credit card use.
Not shopping “for fun”.
Remember your savings goals.
Buy only what you need.
Pay bills on time to avoid fees and charges.

21. Budget Tools Tools to manage your budget: Monthly payment schedule
Monthly payment calendar
Computer software Quicken, Excel

22. Activity 3: Monthly Payment Schedule
Sunday
Monday
Tuesday
Wed.
Thursday
Friday
Saturday 1 2
$400 paycheck
$25 savings
$150 car
$25 personal
$30 insurance 3
$166 transportation 4 5
$25 interest (income) 6
$30 cell phone 7 8 9 10 11 12 13 14 15 16
$40 phone bill 17 18 19 20
$10 credit card/ loan 21 22 23 24 25 26 27 28
$40 entertain-ment 29 30
Know what you owe before you owe it!

23. Budget Check Budget a plan for spending and saving money
Every month compare your actual income to what you budgeted.
Compare actual expenses to what you budgeted.
Adjust future budgets to be more realistic.

24. Increase Income Part time job Work additional hours
You can increase income by:
Part time job
Work additional hours
Negotiate your salary.
Move money to interest bearing savings accounts.
Chores
Gifts
Sell items on-line/yard sale.
You can increase income by: Seeking a part time job or work additional hours at your existing job.
Negotiating your salary.
Moving money from checking to
interest bearing savings accounts.
Selling items on-line or in a yard sale

25. Decrease Spending You can decrease spending by: Carry less cash
Control your credit card use.
Not shopping “for fun.”
Remember your savings goals.
Buy only what you need.
Pay bills on time to avoid fees and charges.

26. Help! I Can’t Pay My Bills!
You add up your bills and the total is
$516, but your income is only $425…
What do you do?
Pay your rent or mortgage
Pay necessary household expenses
Pay high-interest loans
Talk to your creditors