1. UK 101 Money Management

2. Overview What is a Budget  SMART Goals  Income Received  Expenses spent  Sticking to Your Budget Saving $$$$  Tips Common Money Mistakes Credit  Revolving credit  Credit History  Advantages/Disadvantages Bean Game

3. SPENDING DIARY Activity

4. Elements of a Budget

5. What is a Budget? A budget is a financial record of how much money you earn and how much money you spend on items. A tool you can use to track your expenses and income. To create a budget, complete these 4 steps:  Set goals for yourself  Know how much income you receive each month  Know how much money you spend each month  Stick to your budget.

6. Goal Setting Goals give you direction and a purpose for working toward things that are important to YOU! To help identify your goals, ask yourself the following questions:  What do I want to do with my money?  How much will it cost?  How long will it take to get that much money?

7. SMART Goals Specific: who will be involved, what is the goal, and why do you want to achieve this goal? Measurable: so you know if you have made progress or reached the end point Attainable: Don’t set yourself up for failure. Set a goal that you think you can accomplish. Relevant: It has to have meaning for you. If you don’t want to reach the goal you will not be motivated to take the steps needed to accomplish Timed: Timing or season may influence how motivated you are or your ability to accomplish the goal.

8. Income: How Much Do You Make? Look at your pay stub and your amount of gross pay:  Gross pay is the amount of money you earn before deductions. Next determine what your take home (net) pay is.  Take home pay is calculated by subtracting deductions from your gross pay.  Deductions could be your:  Dental insurance  Medical insurance  Life insurance  Retirement deductions  Social security taxes  Medicare taxes

9. Income Continued Finally you need to include any other money you may receive such as:  Tips  Commission  Rent  Interest  Dividends Add your take home pay and any other money you receive and you will have a realistic picture of how much money you earn.

10. Expenses: How Much Do You Spend? The best way to keep track of your expenses is to write down EVERYTHING you buy, even if something is just 50 cents or a dollar. Group your expenses into categories such as food, clothing, gifts, insurance, etc. This will give you a clearer picture of where you money is going each month.

11. Sticking to Your Budget To give you an idea of how much money you spend and make, record your income and expenses for an entire month. This will give you a base from which you can estimate your monthly expenses. From this base, plan out what you will spend the following month. Estimate any major expenses, emergencies, seasonal expenses, debts and items such as rent/mortgage and other monthly bills. In doing so, you have created a budget for yourself.

12. Questions to Ask Yourself… If you feel yourself wanting to give in and straying away from your budget ask yourself 3 questions:  Will this purchase help me reach my financial goals?  Is this purchase listed on my budget?  What will I have to give up if I spend my money on this purchase?

13. Saving Money

14. Importance of Saving Money It can be difficult to save when money is tight but anything you can save will help you in the future. You may want to include saving as a line item in your budget.

15. Saving Tips

16. Common Money Mistakes

17. Not saving enough money. Ask yourself what you would do if your car broke down or you lost your part-time job? Living on the financial edge. Many people have to borrow money when a financial crisis occurs. Motivate yourself to spend less and save the difference for emergencies and future financial goals.  When you have a goal, spending less doesn’t seem like deprivation but more like moving toward your goal—and that is very satisfying.

18. Common Money Mistakes Continued Spending on impulse. Before you buy something, ask yourself if you really need the item or can get along with something that you already own or could borrow, rent, or buy used.  For costlier items, do research and compare at least three vendors to make sure you’re getting the best value.

19. Credit Cards

20. Credit: What is it? Credit is a service that lets you buy now and pay later. You use someone else’s money to buy something you want to use now. Credit means using your money from future paychecks to pay for something you buy now.

21. Credit & Revolving Credit Credit cards are a form of revolving credit. Revolving charge accounts allow you to borrow at any time, in any amount up to a maximum credit limit.

22. How Much Does Credit Cost? When you buy on credit, you use someone else’s money so you can buy something now. The price you pay of using the money is called interest. Interest varies from creditor to creditor, so shop around, and ask the following questions:  What is the annual percentage rate?  How long do you have to pay off the loan?  What is the cost of late charges for overdue payments?  If you pay the loan off early, are there any pre-payment penalties?

23. Credit History Your credit history shows your ability and willingness to repay a debt. It is measured by your record of paying bills. It is determined by how prompt and reliable you have been in making past credit payments. A good credit history helps you qualify for credit and helps you get credit at a lower cost.

24. How Long You Take to Repay The longer you take to repay your debt, the more you will pay. Take the shortest amount of time to repay a debt and make the highest monthly payment you can safely afford.

25. Should You Use Credit? Before buying an item on credit, ask yourself if you can justify using credit rather than waiting to buy the item when you have the cash.  Is this something I really need?  Is this something I planned in my budget?  Can I make payments?

26. Advantages Disadvantages Credit allows you to use an item while you are paying for it. If you carry credit cards, you can carry less cash. With credit, you can buy more than you can afford. If you don’t understand the credit contract, you may agree to something you don’t really intend to. Overuse and abuse of credit can lead to a poor credit rating. The use of credit ties up money out of paychecks in the coming months. Advantages & Disadvantages of Credit

27. Reducing the Cost of Credit You can reduce the cost you pay for credit if you:  Make as large a down payment as possible.  Shop around for the lowest annual percentage rate  Arrange the highest monthly payment you can afford  Pay your bills on time, which protects your credit rating  Only use credit when you really need it

28. BEAN GAME Activity

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30. Questions???