Embed Size (px)
Citation preview
1
Table of Contents
Introduction 3Step 1: Think About What is Important for You 4-5Step 2: Separate Needs and Wants 6-7Step 3: List All Income 8-9Step 4: List All Expenses 10-11Step 5: Match Income and Expenses 12-13Step 6: Look for Ways to Save Money 14-15Step 7: Make a Budget 16-17Step 8: Keep Track of your Money 18-19Step 9: Review Your Budget 20Step 10: Take the “Yes” or “No” Quiz 21Resources for Financial Assistance 22References 23
2
Introduction
Money can be fun and exciting – but it can also be hard and frustrating. The information and activities in this booklet will help you manage your money better. You will learn about income and expenses, how to create a budget and how to save for things that are important to you.
You may want to make extra copies of the worksheets so you can do them again and make changes as needed.
What is a Budget?
A budget is a plan for saving and spending your money. It shows how much money you have coming in (income), how much is going out (expenses), and how you might save some money.
Budgeting…
• shows you how much money you have • helps you make decisions about the money you spend • helps you save money and plan for the future • simplifies and increases financial independence
3
Step 1: Think About What is Important for You
A good place to start when making a budget is to think about what is important for you.
What do you want to be able to do with your money? • What do you want to work toward?
You may have several things to work toward. You maybe be able do some things in a few months, but others could take much longer.
Some examples: • Having enough money to pay your own bills • Paying all of your bills on time • Saving money • Giving money to charity or other organizations • Taking a vacation • Getting a better apartment or buying a house • Buying a car • Buying personal items
4
Activity 1: List What is Important for You
Write down specific things or
activities you would like to use your money for.
5
Step 2: Separate Needs and Wants Needs are things we require or must have in order to live.
• Examples of needs: Housing
Medicine
Food
Water
Clothing
Wants are “extras” that make our lives more comfortable and enjoyable but are not necessary.
• Examples of wants: Big screen TV
Designer clothes
Toys & video games
Eating out
Going to the movies
6
Activity 2: List Your Needs & Your Wants
Write down things you need in the first column and things you want in the second column.
What do I Need? What do I Want?
7
Step 3: List All Income
Income is the money that comes into your household.
This money could come from:
• Paycheck • Supplemental Security Income (SSI) • Social Security Disability Insurance (SSDI) • Money you take out of savings • Money from family members and friends (if regular)
EXAMPLE: Susie works part-time and earns $250 each month from her job. She also receives a Social Security check each month for $500. In addition, her parents give her $50 to help with groceries. When you add these up, her total income is $800 per month. Where my money comes from Amount per month
Paycheck $250
Social Security Income $500
Financial help from family and
friends $50
Total Income: (add up all the
numbers)
$800
8
Activity 3: List All Income
Write down all of the money you earn or receive each month in the table below.
Add up all the numbers to get your total income.
Month ____________ Year __________
9
Where my money comes from
Amount per month
Paycheck
Social Security Income
Financial help from family and friends
Other (specify)
Other (specify)
Other (specify)
Total Income: (add up all the numbers)
Step 4: List All Expenses
Expenses are the money you spend each month. Expenses could include:
Rent Haircuts Water and Sewer Car payments, insurance, gas
Electric/Natural Gas Insurance and Repairs Cable, phone, internet Credit Card Payments Medicine Food (including eating out) Clothes/shoes Pets Personal items Entertainment/fun
EXAMPLE: Susie rents her own apartment so each month she must pay her rent and utilities. She also has other expenses like groceries, bus tickets and doing fun things like eating out and going to the movies. Her total expenses for the month are $950.
Expenses Amount per month
Rent/Mortgage $400
Electricity $100
Telephone/Internet $75
Cable/Television $75
Food (groceries) $150
Eating out $100
Entertainment/Recreation $25
Transportation – Bus tickets $25
Total Expenses $950
10
Activity 4: List Expenses
Write down all of the money you spend each month in the table below. Some of these will be the same each month but others may change. Add up all the numbers to get your total expenses.
Expense Amount per Month
Rent/Mortgage
Water/Sewer
Electricity & Gas
Telephone/Internet
Cable/Television
Food (groceries)
Eating out
Personal items
Entertainment/Recreation
Transportation
Other (specify)
Other (specify)
Other (specify)
Other (specify)
Total Expenses (add up all the numbers)
Step 5: Match Income and Expenses Now it is time to see how you well you are doing with your money.
11
• Do you have money left over each month? • Are you spending more money than you earn each month?
If you have money left over – great job! If you came up short, you can look for ways you could increase your income or decrease your expenses – or both.
EXAMPLE: Susie has $800 coming in each month (income), but she spends $950 each month (expenses). The minus sign means she spent more money than she has, and she runs out of money at the end of each month! Cost saving ideas on the following pages can help Susie get back on track.
Matching Income & Expenses Write down total monthly income
(from Activity 3 on page 9) $800
Write down total monthly expenses
(from Activity 4 on page 11) $950
Subtract expenses from income & write
amount here -$150
12
Write in your total monthly income and your total monthly expenses. Subtract your expenses from your income and write down the total in the last box. This number will be positive if you have money left over and will be negative if you are spending more than you earn each month. Matching Income & Expenses Write down total monthly income (from Activity 3 on page 7)
Write down total monthly expenses (from Activity 4 on page 9)
Subtract expenses from income & write amount here
The next steps will help you see where you can save money, and then create a budget or plan for saving and spending money each month.
13
and Expenses Activity 5: Match Income
14
Step 6: Look for Ways to Save Money
• Adjust thermostat when leaving the house or sleeping • Make a shopping list and buy only the items on the list • Shop at discount stores • Buy generic items instead of name-brand • Use coupons and look for sales • Look for free community events (festivals, concerts, movies) • Borrow free books and movies from the library • Apply for a free government cell phone • Buy only what you need instead of what you want • Cook and eat most of your meals at home • Avoid borrowing money from family and friends • Use cash instead of credit cards • Get other quotes for car insurance
15
Activity 6: List Ways You Might Be Able to Save Money
Write down some specific ways you might be able to save money, for example using coupons for groceries or turning off the lights when you leave a room.
16
Step 7: Make a Budget We have reviewed your income, expenses and now we need to make a budget. A budget is a plan for saving and spending your money. The totals for income and expenses must match or your expenses must be less than your income.
EXAMPLE: Susie spent too much money each month. She has found ways to save money and has made a budget on how she plans to spend her money. Notice that her total income and total expenses are both $800.
Planned Expenses1. Rent $400
2. Electricity $80
3. Phone/internet $50
4. Cable $50
5. Groceries $150
6. Bus tickets $25
7. Eating out $25
8. Savings $20
TOTAL $800
17
Planned Income
Paycheck $250
SSI $500
Family $50
TOTAL $800
Activity 7: Make a Budget
Start with writing down your income. Then write all of the things you plan to spend money on. The total of your expenses and your income should match or your expenses must be less than your income.
Planned Income
1.
2.
3.
4.
TOTAL
Planned Expenses
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
TOTAL
18
Step 8: Keep Track of Your Money It is important to keep track of your money each month so you can budget correctly. You will need to write down:
• Date • Item • Income • Expenses • Amount paid/received
Use a plastic bag or envelope to keep all receipts. EXAMPLE: Susie has started to keep track of her income and expenses. Each time she spends or receives money she writes it down and puts the receipt in a plastic bag or envelope. Use a plus sign (+) for income and a minus sign (-) for expenses.
Date Item Amount
7/1/2010 SSI check +$500
7/3/2010 Rent -$400
7/10/10 Fast food -$4.65
7/12/10 Movie ticket -$8.50
7/15/10 Paycheck +$125.00
7/15/10 Groceries -$32.47
19
Each time you spend or receive money write it down on this worksheet. Use a plus sign (+) for income and a minus sign (-) for expenses. Save all your receipts in a plastic bag.
Month ____________ Year _________
Date Item Amount
20
Your MoneyActivity 8: Keep Track of
Step 9: Review Your Budget Each week, or month, review all the worksheets to see what is working and what is not. You may want to ask a trusted family member, friend, or staff person to help you with this.
• Did you remember to write down the money you are spending? • Are you saving all your receipts? • Are you following your budget? • Do you need to make changes? • Are you getting closer to your budget goals?
REMEMBER…
• Don’t be afraid to ask for help if you spend too much. • Budgeting is an on-going process. You move from one step to the next
over and over again. • Don’t give up on your budget. If you make a mistake, try again next time!
21
Start Again
save your receipts form (page 17) & on the tracking money you spend Write down all the
page 15 your budget on changes to needed Make any
on page 15 with your budget tracking sheet Compare your
(page 17) tracking form on the you receive all the money Write down
page 15) (budget Make a
Questions Yes No
1. Do you know what the word ‘budget’ means?
2. Do you know where your money comes from?
3. Do you know how to create a budget?
4. Do you know what you have spent your money on by the end of the month?
5. Do you know who to ask for help with your budget?
22
or “No” Quiz Step 10: Take the “Yes”
Resources for Financial Assistance
• Department of Social Services • Food stamps; Women, Infants, and Children (WIC); Low-income
Energy Assistance Program; Crisis Intervention Program • Community resources like food banks, community action agencies
and faith-based programs • The United Way (for local resource information) • Utility companies for possible payment plans • Prescription assistance programs • VITA tax preparation sites for free help filing taxes and collecting
tax refunds Make sure that you receive the most for your money by checking your credit report to make sure that it does not have wrong information about your credit history.
To order a free credit report: Call: (877) 322-8228 Log on to: www.annualcreditreport.com Write: Annual Credit Report Request Service PO Box 105281
Atlanta, GA 30348-5281
23
References National Endowment for Financial Education & The Arc of The United States (2001). Make the Most of Your Money! Denver, CO: National Endowment for Financial Education. Stouffer, Tere (2008). Everything Personal Finance in your 20s & 30s (2nd ed.). Avon, MA: Adams Media. Stouffer, Tere (2008). The Everything Budgeting Book (2nd ed.). Avon, MA: Adams Media.
Additional Activity Pages Have Been Included as the Last Pages of Your Booklet
24
Activity 1: List What is Important for You
Write down specific things or
activities you would like to use your money for.
25
Activity 2: List Your Needs & Your Wants
Write down things you need in the first column and things you want in the second column.
What do I Need? What do I Want?
26
Activity 3: List All Income
Write down all of the money you earn or receive each month in the table below.
Add up all the numbers to get your total income.
Month ____________ Year __________
27
Where my money comes from
Amount per month
Paycheck
Social Security Income
Financial help from family and friends
Other (specify)
Other (specify)
Other (specify)
Total Income: (add up all the numbers)
Activity 4: List Expenses
Write down all of the money you spend each month in the table below. Some of these will be the same each month but others may change. Add up all the numbers to get your total expenses.
Expense Amount per Month
Rent/Mortgage
Water/Sewer
Electricity & Gas
Telephone/Internet
Cable/Television
Food (groceries)
Eating out
Personal items
Entertainment/Recreation
Transportation
Other (specify)
Other (specify)
Other (specify)
Other (specify)
Total Expenses (add up all the numbers)
Write in your total monthly income and your total monthly expenses. Subtract your expenses from your income and write down the total in the last box. This number will be positive if you have money left over
28
and will be negative if you are spending more than you earn each month. Matching Income & Expenses Write down total monthly income (from Activity 3 on page 7)
Write down total monthly expenses (from Activity 4 on page 9)
Subtract expenses from income & write amount here
The next steps will help you see where you can save money, and then create a budget or plan for saving and spending money each month.
29
and Expenses Activity 5: Match Income
Activity 6: List Ways You Might Be Able to Save Money
Write down some specific ways you might be able to save money, for example using coupons for groceries or turning off the lights when you leave a room.
Activity 7: Make a Budget
30
Start with writing down your income. Then write all of the things you plan to spend money on. The total of your expenses and your income should match or your expenses must be less than your income.
Planned Income
1.
2.
3.
4.
TOTAL
Planned Expenses
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
TOTAL
31
Each time you spend or receive money write it down on this worksheet. Use a plus sign (+) for income and a minus sign (-) for expenses. Save all your receipts in a plastic bag.
Month ____________ Year _________
Date Item Amount
32
Your MoneyActivity 8: Keep Track of
