1. Planning a Budget
Chapter 28

2. Did anybody see Borat this weekend?

3. Today’s Schedule Final Project Notes & Information
Assignment of Homework
Chapter 28
Quiz

4. Final Project Notes & Information
Progress Feedback
I need a copy of your first assignment
Next assignment will be due on Friday
Projected Income Statement (5 points)
Use a sample income statement as a point of reference
List projected expenses & projected revenue
How will you make the goal set forth for you?
Due 11/10/06

5. Homework Assignment Final Project Assignment Chapter 28
Definitions for Key Words

6. Chapter 28 Learning Objectives
Explain how budgeting is helpful
List the five steps in planning a budget
Name different types of income and expenses
Describe how a computer is used in budgeting

7. Why It’s Important
Budgeting Techniques help you keep track of where your money goes so that you can make it go further
Do the best with what you’ve got

8. Average Monthly Household Expenses
Based on $3,125 per month

9. Lifestyle Costs Money is Limited for most
Most want more than they can afford
Money Management
The process of planning how to get the most from your money
Budget
Plan for using your money in a way that best meets your wants & needs
Includes: Expected income, planned expenses, planned savings over a period of time
Sample Budget on Excel

10. 5 Steps to Planning a Budget
Set your goals
Estimate your income
Estimate your expenses
Plan for savings
Balance and adjust as needed (be adaptable)

11. Step 1: Set Goals What do you want to accomplish in the next month?
Next year?
Next Five years?
What’s important to you?
How will I get there financially

12. Step 2: Estimate Income
Income – Actual amount you earn or receive in a time period
Gross Pay
Net Pay
Other Income
Taxes

13. Gross Pay
Total amount of money you earned for a specific time

14. Net Pay Gross Pay minus deductions Deductions
Amounts taken out of your pay before you receive your paycheck
Include: Taxes, health insurance, retirement, union dues
Could include: Child Support, money owed to creditors, etc.

15. Other Income Could include: Tips (do not include while budgeting)
Other funds earned by those within a household
Gifts, etc.

16. Taxes Withholding Federal, State, Local
Subtracting taxes from a paycheck to be forwarded to the government
Federal, State, Local
Taxes not withheld must be budgeted
Lottery Winners, self-employed persons

17. Step 3: Estimate Expenses
Expenditures
Anything you spend money on
Must budget for known expenditures
Must have money available for the unknown
Fixed Expenses
Variable Expenses

18. Fixed Expenses
Expenses that occur regularly and that are regularly paid
Rent, Insurance, Car Payments, etc.
Can change over time
Cannot reduce or avoid them

19. Variable Expenses Expenses that fluctuate
Food, phone bills, entertainment, gifts, etc.
Look at trends

20. Step 4: Plan for Savings Make it possible for future wants
Can cover expenses for which you did not budget

21. Step 5: Balance & Adjust the Budget
Usually the most difficult step
Budget Variance
The difference between how much you planned to spend and how much you actually spent
Total expenses should always be less than total income
If not, you must make changes

22. Quiz What are the five steps of planning a budget? (5 points)
What are the two types of expenses? (2 points)
______ is the process of planning how to get the most from your money. (3 points)
Extra Credit – At present, De La Salle offers _____ bus routes. (1 point)