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Due: Tracking Your Spending Bell Ringer: What is an impulse purchase ?. Planning a budget. Lifestyle – Pre-budgeting. Lifestyle is a way of living that reflects that person’s attitudes and values Where will you live? Rent or Own - PowerPoint PPT Presentation
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Due: Tracking Your Spending
Bell Ringer:1. What is an impulse purchase?
Planning a budget
Lifestyle – Pre-budgeting Lifestyle is a way of living that
reflects that person’s attitudes and values Where will you live? Rent or Own What do you prefer in clothing? Latest
styles, sales, or resale What are your tastes in food? Eat out,
microwave meals or made from scratch What transportation will you use? Own
car, public transportation or biking
What are your values?1. Savings2. Food 3. Clothes 4. Sports/Recreation5. Church/giving 6. Car 7. School expenses 8. Hobbies 9. Social Activities 10. Personal appearance
Importance of Budgeting A budget is a plan for using your
money in a way that meets your wants and needs
Helps to control spending and accomplish goals
Not designed to deprive but assist in reaching personal goals
What Makes a Good Personal Budget? Ability to cover basic expenses Cash for the unexpected Savings for the future
**Create a budget you can live with!!**
Steps in Planning a Budget 5 Steps to planning a budget
1. Set your goals2. Estimate your income3. Estimate your expenses4. Plan for savings5. Balance and adjust your budget
Set your Goals What do you want to accomplish in
the next month? What is important to you? Are your goals practical?
It is useless to set a goal to buy a computer in one year if your income per year is less than the computer costs.
Estimate your Income Gross Pay – the total amount of
money you earned for a specific time
Deductions – are certain amounts that are subtracted from your pay before you receive your paycheck
Net Pay = Gross pay minus deductions sometimes called take home pay
Things that can affect your income level Education Level Occupation Experience Health
Possible Paycheck Deductions Federal Income Tax State Income Tax Retirement Health Insurance Social Security Medicare
Estimate your Expenses Fixed—paid regularly
Rent, insurance, car payments Variable (Flexible)—amount varies
Food, clothing, gas for car Discretionary – Expenses that can
be cut out completely Donations, gifts, charity,
entertainment
Plan for Savings Help to protect against unexpected
expenses Helps with future wants Helps with expenses that are
higher than you budgeted for PYF (Pay Yourself First)—10% right
when you get your check Investing – earning money with
your savings
Balance and adjust budget Check to be sure that actual
expenses are actually meeting costs you budgeted for
Check weekly, monthly and yearly Either cut expenses or increase
income
Personal BudgetINCOME TOTALSWorkAllowancesLunch MoneyTOTAL INCOMEEXPENSESDaily LunchesSuppliesSnacksEntertainmentSAVINGSDepositsTOTAL EXP & SAVINGS
Ways to Stick to a BudgetShop with budget in mindPlan for large purchases so you
know you can afford themNegotiate when possibleAvoid impulse buyingWatch for salesTrack purchases
SUBCATEGORIES IN YOUR BUDGET
Housing Payment/Rent Utilities Insurance Property Taxes Repairs & Maintenance
Transportation Payment Insurance Fuel Cost Repairs & Maintenance
Food Food at Home Cost of Eating out
Cost of Children Clothing Healthcare Child Care Education Miscellaneous – sports, hobbies &
activities
Insurance Besides auto & house/renters Health Disability Life
Other Credit card debt Entertainment Personal Care Health Care (not covered by
insurance) Apparel & Services Contributions & Charity Education & Reading