1. Objective: Students will learn how to prepare a budget and identify the difference between financial planning and personal budget.

2.   We’ve discussed financial planning, who can tell me what is financial planning? Financial Planning

3.   While both financial planning and budgeting are important tools in creating a stable financial situation each function provides specific benefits.  Budgeting makes it possible to handle day-to- day costs and expenses in a manner that keeps you moving forward.  Financial planning makes it possible to have a destination or goal for that movement, which in turn enhances the work of the budget. Financial Planning & Budgeting

4.   The financial plan is the identification of the goal, while budgeting is the tool to make the realization of that goal possible. Financial Planning versus Budgeting

5.   If the goal is to set aside funds for a child’s college education:  Financial planning will go through the process of determining how much money must be set aside in order to fund four years at the institution of choice.  Once the goal is clear, it is possible to look at the available revenue stream and determine how much money must be set aside each pay period in order to save the desired amount of money. That amount is then included in the budget and set aside each pay period so the funds will be available for the child’s college career. For Example

6.  1.Gather every financial statement you can. 2.Record all of your sources of income. 3.Create a list of monthly expenses. 4.Break expenses into two categories: fixed and variable. 5.Total your monthly income and monthly expenses. 6.Make adjustments to expenses. 7.Review you budget monthly. How to Create a Budget

7.   When creating a budget it’s best to K.I.S.S.  What you should remember:  Expenses > Income = Bad  Expenses < Income = Good Formula

8.  Income: Net Pay $3,000 a mo. Expenses: Home$1,500 a mo. Car$350 a mo. Food$400 a mo. Savings$750 a mo. Total Expenses$3,000 a mo. Sample Budget

9.   What was our objective for today?  Tomorrow you will have an in class packet to complete about personal budgeting. Conclusion