Budgeting Take Charge Key Terms about Budgeting What
Budgeting Take Charge
Key Terms about Budgeting What A is a Budget? PLAN for your money Helps to control spending and accomplish goals It is not meant to restrict you, but to have a realistic idea about your finances.
Steps in Planning a Budget Set your goals 2. Estimate your income 3. Estimate your expenses 4. Plan for savings 5. Balance and adjust your budget 1.
A Closer Look… Income Net Income – AKA Take Home Pay This is actually what you bring home. Your paycheck has deductions taken out (taxes, etc. )
A Closer Look… Expenses can be broken in to two categories Fixed expenses – paid at regular intervals, usually the exact same amount each month Examples: House payment, car payment, student loans, insurance, etc. Variable expenses—may have to pay each month, but the amount changes Examples: Food, utilities, gas & car expenses (not the loan), clothes, gifts, entertainment, etc.
Savings & Investing as part of your budget… Pay Yourself First (PYF) – recommended amount is 10% Review: Why would we make this part of the budget instead of seeing what’s left over at the end of the month? Answer: Our budget should reflect our goals! And savings should be a part of your goals
Balance & Adjust your budget Things change over time If you are over budget, what can you do? Increase income Decrease expenses
Personal Budget INCOME Work Allowances Lunch Money TOTAL INCOME EXPENSES Daily Lunches Supplies Snacks Entertainment SAVINGS Deposits TOTAL EXP & SAVINGS TOTALS
Consumer Guidelines for setting up your budget Other 10% Retirement 9% Housing 32% Entertainment 5% Health Care 5% Clothing 3% Utilities 10% Transportation 15% Food 11%
Ways to Stick to a Budget Shop with budget in mind Plan for large purchases so you know you can afford them Negotiate when possible Avoid impulse buying Watch for sales Track purchases
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