1. Clue In: Budgeting Basics Curriculum Kit
Career Development Software, Inc. Copyright 2007

2. Budgeting & Goal Setting
Budget -- a planned system of spending and saving money.
A budget’s purpose is to give you control over financial planning goals.
Long term goals: usually involve substantial amounts of money - car, house, college tuition, retirement
Short term goals: are more immediate -- rent, groceries, clothing, entertainment, and vacations
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

3. Budgeting & Goal Setting
Planning a budget involves balancing income with expenses and prioritizing your goals.
Prioritizing goals may involve deferring or eliminating current pleasure for future benefit.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

4. Fixed or Flexible? Fixed Expenses Flexible Expenses
Re-occurring or promised amounts that represent universal needs such as food, basic housing, basic transportation.
Flexible Expenses
Also referred to as “wants” these are things that can be put off. Wants or flexible expenses include entertainment, eating out, fancy cars, sound systems.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

5. Fixed or Flexible?
Savings - regular saving should be included in each month’s plan
Emergency Fund - short term saving for emergencies
Should be enough to cover 2-3 months of fixed expenses
Long Term Savings
This covers the down payment on a home or college tuition or other long term goals
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

6. Wants vs. Needs
If your money didn’t go far enough, how can you adjust your budget?
Review your goals and see if you are indulging in too many wants rather than needs.
Decrease spending - this usually involves reducing your flexible expenses.
Track cash - keep your receipts in a common place.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

7. Wants vs. Needs
If your money didn’t go far enough, how can you adjust your budget?
Increase Income - look for additional part-time work, ask for a raise in current pay or allowances.
Curb Impulse Buying - spontaneous spending gives instant pleasure but is death to budgeting.
Decrease Fixed Expenses - this involves a major move like trading in for a cheaper car.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

8. Wants vs. Needs
For budgeting to be successful, accurate information and regular review is necessary.
As life changes so will your budget.
moving out, college, getting married, having children, retiring all require planning
Planning and following a budget will help you achieve your goals.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

9. Related Expenses
When budgeting for a new purchase look for related expenses.
These costs are often hidden or passed over because of the excitement of a new purchase.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

10. Related Expenses Here are some examples: A new or used car
related expenses: insurance, fuel, repair, maintenance, licensing
A new computer
related expenses: upgraded software, faster modem, internet access fees, additional telephone line/access
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

11. Related Expenses Here are some more examples:
Renting or buying a house
related expenses: furniture, utilities, insurance, telephone, food, rent, cleaning supplies, hookup fees and charges
An pet dog/cat or animal
related expenses: food, vet maintenance, shots, licensing, boarding, grooming
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

12. Plan A Trial Budget Estimate Income
Include regular income such as net paychecks and allowances.
If self employed, remember to deduct year end self employment taxes from your income.
Underestimate irregular income that you expect to receive.
Record income in the monthly period you expect to receive it.
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

13. Plan A Trial Budget How To Estimate Monthly Spending
Research past spending habits
Look at your spending in the last three months to a year.
Group expenses by category and total each category.
food, clothing, household expense, entertainment, supplies, transportation
Record all spending for at least a month.
set up your categories
note the expenses in the appropriate group
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

14. Budgeting Tips Track cash income and expenses
Keep budgeting material all in one place
Cover fixed expenses before spending on wants
Choose a regular time to record information and review your budget
Anticipate related expenses
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007

15. Budgeting Tips
Keep the process as simple as possible, round figures to the nearest dollar
Plan monthly to save for quarterly, semi-annually or annual expenses
Don’t forget long term planning
Be specific with categories without over itemizing
Be realistic!
Clue In: Budgeting Basics
Career Development Software, Inc. Copyright 2007