1. Budgeting
Resource 03-04

2. BUDGETING What is tracking?
Tracking is the accounting of spending and receiving money in order to see where your money is going.
What is a budget?
A budget is a plan that allows you to meet your personal goals with a system of saving and wise spending.
What is a want?
A want is something that is NOT necessary for survival but that adds to the comfort or pleasure to our lives.

3. BUDGETING Cont. What is a need?
A need is something that IS necessary for survival such as food, clothing and shelter.
Components of a Budget
Income
Fixed Costs
Variable Expenses
One Time Spends
Contingency/Emergency Fund
Savings

4. BUDGETING Cont. Making a budget can help you: Plan for expenses
Cut spending
Spend Wisely
Save for future goals
Develop lifelong money management skills

5. BUDGETING REVIEW Cont. Your budget should be flexible and realistic.
In this class you will learn to budget by hand to ensure that you have a clear understanding of the concept.
In the future you may want to try to use a budgeting site or app.

6. BUDGETING OVERVIEW Components of a Budget Income Fixed Costs
Variable Expenses
One Time Spends
Contingency/Emergency Fund
Savings

7. BUDGETING OVERVIEW Cont.
Components of a Budget
Income: money earned or obtained
Salary/Wages
Allowance
Alimony
Loans
Savings
Social Security Income
Child Support

8. BUDGETING OVERVIEW Cont.
Components of a Budget
Fixed Costs: expenses that don’t change
Rent/Mortgage
Utilities (gas, lights, water)
Cell Phone
Internet
Government/ Bank Fees
Insurance

9. BUDGETING OVERVIEW Cont.
Components of a Budget
Variable Expenses: expenses that change month to month
Transportation
Travel and events
Entertainment
Gas for car

10. BUDGETING OVERVIEW Cont.
Components of a Budget
One Time Spends: purchases that not often made
Furniture
Computers
Software
Gifts
Car/Boat/House
Contingency/Emergency Fund
Savings

11. Budgeting Formula
[(earnings+other income) – (fixed costs + variable expenses + one time spends+ emergency fund + savings)] = Discretionary money (money left over)

12. Business Scenario
You are a high school student with a part time job making $600 dollars a month. You live at home but you have to pay for your own phone. You have 3 options: Droid or Iphone. Plans for Droid: $60, $70 or $80 and Iphone plans $75, $85, $95. You spend $50 dollars on public transit monthly. You help your parents with household items of about $30 a monthly. You are trying to save up for a car.
What is income? What are variable expenses? What are fixed costs?
What cell plan did you select? How would you put together a budget?

13. KNOWLEDGE CHECK
You are a student at Xavier University. You have $500 in savings. You receive a grant that covers your tuition and books as well as room and board. You take a part-time job which pays you $150 per week. You have to pay for utilities (water& electric), cell phone bill, internet, food and entertainment. Analyze the situation. Describe in detail how you would come up with a budget and what would be included in the budget. Remember to identify the components. No calculations needed.

14. EXIT TICKET What is a budget?
What are two of the components in a budget?
Give me two examples of income?
Give me an example of a fixed cost?
What is a contingency fund?