Budgeting
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Budgeting

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Budgeting Budgeting Presentation Transcript

  • “Money is like fire. You can use it wisely and become successful, or you can use it unwisely and be burned by it.”
    -Anonymous
    Making money sensetips and ideas to help your family prosper
    Budgeting
  • The budgeting process
    Set personal and financial GOALS
    Identify current sources of INCOME
    Assess your personal and financial situation (must-haves, wants and savings) based on your VALUES and LIFE SITUATION
    Monitor current SPENDING patterns
    Recommended websites; these sites will track this automatically for you
    Mint.com
    Wesabe.com
    1
    Source: www.practicalmoneyskills.com
  • The budgeting process - Continued
    Identify FIXED and VARIABLE expenses based on projected income
    Compare your BUDGETED amount to what was ACTUALLY spent for the month
    Review financial progress and revise budgeted amounts
    2
  • Fixed versus Variable Expenses
    Fixed: expenses you must pay each month (similar to must-have expenses)
    Variable: expenses that you have the ability to control
    Which expenses are essential to your family’s well-being?
    Which have the highest priority?
    Which areas can be reduced to keep family spending within your income?
    How much can you afford to spend in each category?
    3
  • Set personal & financial goals
    My financial goals include:
    1.
    2.
    3.
    My professional goals include:
    1.
    2.
    3.
    My family goals include:
    1.
    2.
    3.
    My health/physical goals include:
    1.
    2.
    3.
    “Obstacles are those frightful things you see when you take your eyes off your goals.”
    -Henry Ford
    4
  • Working with your goalsWhat goals are the most important to you?
    Choose one or two goals from each category that are the most important to you. Identify each goal as a short-term (1-4 weeks), medium-term (2-12 months) or long-term (1 year or longer).
    1. (most important)
    2.
    3.
    4.
    5. (least important)
    5
  • Working with your goalsPrioritize your goals
    List and prioritize two of your most important goals. After each goal identify what you could be doing now to work toward the goal and what resources (if any) you need to achieve each goal.
    Goal #1:
    Goal #2:
    6
    Share these goals with the people that can help you achieve them.
  • Identify current sources of income
    Average Monthly Income
    7
  • Must – haves, wants & savings
    Must-haves: things we must pay no matter what
    This should equal 50% of your take-home pay
    (i.e.: mortgage, utilities, auto loan, etc)
    Wants: things that are not really needed, but help make life more enjoyable
    This should be equal to 30% of your take-home pay
    (i.e.: cable TV, satellite radio, entertainment, etc)
    Savings: opportunity to save toward dreams and/or money put aside for future needs, emergencies and paying off debt
    This should be 20% of your take-home pay
    8
    Source: www.thriventffc.com
  • Take a minute to list out your must-haves, wants and savings (by month)
    9
  • Then divide the dollar amounts by your take-home pay. Do they equal the proper percentages? Where do you need to make some changes?
    Must-haves $__________ / $__________ (monthly take-home pay) = __________%
    Should be equal to 50%
    Wants $__________ / $__________ (monthly take-home pay) = __________%
    Should be equal to 30%
    Savings $__________ / $__________ (monthly take-home pay) = __________%
    Should be equal to 20%
    10
  • Monitor your spending patternsHomeworkUse the form below to track your spending for 2 – 4 weeks. This will help you see where your money is going and where you can make some adjustments in the future
    11
  • Habit BreakersWhat bad spending habits do you need to break?
    Example
    Now, you try…
    12
  • Budget
    Average Monthly Expenses
    13
  • Budget
    Average Monthly Expenses – Cont.
    14
  • Budget
    Average Monthly Expenses – Cont.
    15
  • Budget
    Total your Housing, Food, Transportation and Personal expenses, then add your savings to get a Monthly Living Expenses Total.
    16
  • Budget
    Average Monthly Income
    Carry your monthly income down and subtract your expenses from the previous page; this gives you an amount left over to pay off additional debt.
    17
  • Debt
    Credit cards, home equity loans, car payments, student loans, medical bills, etc.
    18
  • Bottom Line
    Carry over your debt, monthly debt payments and subtract from amount available for debt on page 18; this gives you your bottom line.
    19
    Source: www.practicalmoneyskills.com
  • For more information:
    920.882.4800
    www.myprospera.com
    For more great financial tips and news follow us on Twitter and facebook!
    http://twitter.com/MyProspera
    http://facebook.com/