1. Unit 3 Budget: Don’t Go Broke
Step 2: Spending

2. Money Going Out
Money going out is called expenses, which come in two categories
Fixed Expenses—set amount that is the same every time, like rent and car payments
Variable Expenses—amounts that change, like gas for the car or groceries; you have more control over these
Look up rents for a 1-bedroom apartment in Lincoln City for this date on Craig’s list. Notice how much the rents vary. Discuss reasons that could account for this and write them in your notebook. Remember, once you have chosen an apartment, it is a fixed expense.

3. Cash Management and Budget Building
Cash management is how you handle money coming in and going out; also called cash flow
The best way to manage money is a budget
Money is limited so a budget guides monthly spending
A budget helps use what you have for needs, wants and goals
Budgets have two main parts
Income
Expenses
The trick is to balance them; imbalance creates DEBT

4. Cash Management and Budget Building
PYF
Pay yourself first
The government takes its percentage, so you take yours first
Put it in savings
You might want to start with 10% off the top
Important lifetime money management tool
You’ll be dealing with money for your whole life, so learn this now to achieve long term goals

5. Building Your Own Budget
Sample Budget for Tom Thumb for the week of June 6
Money Coming In
Work (after taxes)
Gifts/Allowance
Other
Total Income
Money Going Out
Fixed Expenses
PYF
Car Payment
Auto Insurance
Total Fixed Expenses
Variable Expenses
Gas
Food
Clothing
Fun Stuff
Big Events
Total Variable Expenses
Total Outgoing (fixed + variable expenses)
Any money left over (income minus outgo)

6. Create Your Own Budget
Study the sample budget on the previous slide. Copy the outline into your notebook.
If you don’t have a steady income right now, assume you get an allowance of 20 dollars a week.
If you don’t pay rent or have a car, substitute another fixed expense, like cell phone bills
Your budget should be for one week and should include PYF for goals from Unit 1

7. Making the Most of Your Dollars
How to stretch your dollars
Buy items on sale
Save Coupons
Garage Sales
Thrift stores
Sometimes you have to buy new, so learn to evaluate sales pitches to separate the truth from fiction
Read the fine print
Consumer Reports
Ask around: friends, family, internet bulletin boards
Identify Propaganda for what it is

8. Making the Most of Your Dollar
The Power of Propaganda
Watch the video. In your notebook list and describe the propaganda techniques. How will this knowledge be helpful in making decisions about what to buy?

9. Cost/Benefit Analysis
Weighing the costs of a benefit or service against the benefits it will provide
Imagine you have the opportunity to purchase season passes to Magic Mountain. The season pass is 100 dollars. Individual tickets are 50 dollars. What are the benefits? How many times would you have to attend in one year to break even?
Think of an item or service you would really like to have. Copy the chart into your notebook and consider the costs and benefits.
Costs
Benefits

10. How Do You Spend Your Money
Create a pie chart of your personal budget on power point. An example of expenses is done below.
Print the page and place it in your notebook.

11. Bibliography
TEXT AND ASSIGNMENTS
NEFE High School Financial Planning Program, Student Guide. National Endowment for Financial Education. Greenwood Village, CO
Page 8: “The Power of Propaganda.” You Tube.
Images
Page 7: “The Old Wooden Bucket.” atticPaper
All images not catalogued are from Microsoft ClipArt Gallery.