1. pp. 445-467 Managing Spending

2. What to do with the money you earn? Budgeting Your Money Budget: Budget helps you:

3. Developing a Budget FIVE STEPS : 1. Establish financial goals 2. Estimate your monthly income and expenses 3. Balance your budget 4. Keep track of income and expenses 5. Evaluate the budget

4. Step 1: Establish Financial Goals Decide what you need and want. Start with short term goals and then long term goals. Short term goal: Long term goal: Emergency cash fund:

5. Step 2: Estimate Your Monthly Income and Expenses Income: Expenses: List all potential expenses Fixed expenses: Flexible expenses: Food, clothing, utilities, home furnishings and equipment, transportation, health care, recreation and education

6. Step 3: Balance Your Budget Subtract the expenses you expect to have from the income you expect to get. If expenses exceed income: Budget Take Home pay $ 1,800.00 Expenses Rent $ 1,000.00 Groceries $ 200.00 Utilities $ 150.00 Clothing $ 80.00 Gas $ 120.00 Misc. $ 100.00 Total: $ 1,650.00 Difference: $ 150.00

7. Step 4: Keep Track of Income and Expenses Keep a record of all income you receive Keeping track of expenses is the most important!

8. Step 5: Evaluate the Budget This step helps you see if your budget is working for you. Questions to ask yourself: 1. Do you have enough income to cover your expenses? 2. Is the budget flexible enough to handle unexpected expenses and emergencies? 3. Is your money doing what you want it to do?

9. QUICK REVIEW FIXED vs. Flexible Expenses Products/ServicesFIXEDFLEXIBLE Pet care Car Repair Doctor bill Groceries Movie Rent Car Payment Bowling Phone bill

10. REALITY CHECK 1. Click on link below http://www.lmci.state.tx.us/realitycheck/flash.html 2. Complete the Reality Check Worksheet Turn in to basket when completed.