Personal Finance Section Creating a Budget


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Personal Finance Section Creating a Budget

  1. 1. Personal Finance Section Creating a Budget
  2. 2. Personal Finance Section <ul><li>Creating a Budget: </li></ul><ul><ul><li>A drip from your bathtub faucet can send thousands of gallons of water down the drain each year. Your money can dribble away as well. </li></ul></ul>
  3. 3. Personal Finance Section <ul><li>A $ 14.00 pizza, an $ 80.00 pair of sun glasses, a $ 16 movie ticket - - they don’t seem like much at the time. </li></ul><ul><li>BUT a lifetime pattern of careless spending can be painful, even ruinous. </li></ul><ul><li>Money problems can cause stress, wreck personal relationships, and trap people in jobs they don’t like just so they can pay their bills. </li></ul>
  4. 4. Personal Finance Section <ul><li>There is a better way </li></ul><ul><li>BUDGET YOUR MONEY!!!! </li></ul>
  5. 5. Personal Finance Section <ul><li>Calculate Income vs. Spending </li></ul><ul><ul><li>Budgeting begins simply with writing how much money you receive and how much you spend. </li></ul></ul>
  6. 6. Personal Finance Section <ul><li>Four Steps to Successful Budgeting: </li></ul><ul><ul><li>1. Make a list of all your earnings. Then calculate your total monthly income. </li></ul></ul><ul><ul><li>2. For one month, keep a record of everything you spend money on, from car payments to candy bars. </li></ul></ul>
  7. 7. Personal Finance Section <ul><li>Four Steps to Successful Budgeting: </li></ul><ul><li>3. At the end of the month, organize the records of your purchases into categories such as food, clothing, entertainment, car payments, and etc. </li></ul><ul><li>4. On a sheet of paper or computer spreadsheet, make a list. Then calculate your money. </li></ul>
  8. 8. Personal Finance Section <ul><li>My Spending and Saving Plan </li></ul><ul><li>Monthly Expenditure: </li></ul><ul><li>Car Payment $ 120.00 Insurance $ 42.00 </li></ul><ul><li>Gasoline $ 27.00 Maintenance $ 30.00 </li></ul><ul><li>Food: Lunches $ 58.00 Snacks $ 34.00 </li></ul><ul><li>Movies: Theater $ 28.00 Rentals $ 4.00 </li></ul><ul><li>Clothes: Shoes $ 16.00 Other clothes $ 39.00 </li></ul><ul><li>Savings for school trip $ 50.00 </li></ul><ul><li>Magazine subscription $ 5.00 </li></ul><ul><li>CDs $ 24.00 Gifts $ 0 </li></ul><ul><li>Savings $ 0 Emergencies $ 0 </li></ul><ul><ul><ul><ul><ul><li>Total Budget $ 477.00 </li></ul></ul></ul></ul></ul>
  9. 9. Personal Finance Section <ul><li>This record can reveal how little money is left over at the end of the month. </li></ul><ul><li>Experts recommend that we put aside 10% of each months money and put it into savings. </li></ul>
  10. 10. Personal Finance Section <ul><li>Living within your Budget </li></ul><ul><ul><li>Look at your budget and find ways to cut your spending. </li></ul></ul><ul><ul><li>Previous example – could cut the shoes down to $ 7.00 and other clothes down to say $ 25.00. Cut out the magazine subscription $ 0.00. Take a lunch to school instead of buying the school lunch. </li></ul></ul>
  11. 11. Personal Finance Section <ul><li>Adjust your cuts into the list and now you have a new budget. Try to live by that budget as much as possible. </li></ul><ul><li>Your budget is a plan for saving and spending. </li></ul><ul><li>If you have a hard time living within your budget seek help from others – parents, friends (maybe not), or financial professionals – to help you live within your budget. </li></ul>
  12. 12. Personal Finance Section <ul><li>The Number ONE Rule to live by when making a budget is to always pay your self first. </li></ul><ul><li>If you want to save 10% of your money each month to invest – take out the 10% first and then budget the rest of the money. This is the easiest way to build wealth and have an easier time when you get older. </li></ul>
  13. 13. Personal Finance Section <ul><li>Review: </li></ul><ul><ul><li>1. Why is it important to create a budget? </li></ul></ul><ul><ul><ul><li>What are other ways to save money in your budget? </li></ul></ul></ul>