Budgeting & Saving PowerPoint


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Budgeting & Saving PowerPoint

  1. 1. Budgeting & Saving: Don’t Go Broke!
  2. 2. Can You Believe? <ul><li>On average, teens earn about $5.70 per hour and work about 15 hours per week, for a weekly paycheck of over $80. </li></ul><ul><li>In 1998, the average teenager earned almost $2,300 for the year. </li></ul><ul><li>The average teen receives $50 a week from parents. </li></ul>
  3. 3. Can You Believe? <ul><li>Teenagers in the U.S. spent over $155 billion in 2000. </li></ul><ul><li>Teen girls spend about $91 per week on average, while teen boys spend about $87. </li></ul>
  4. 4. Can You Believe? <ul><li>A little over 1/3 of teens receive a regular allowance, and about 20% of teens have a full- or part-time job. </li></ul><ul><li>22% of teens have checking accounts. </li></ul>
  5. 5. Can You Believe? <ul><li>Almost 60% of teens follow a 50/50 plan: half of any money received is spent, and the other half goes into savings. </li></ul>
  6. 6. What Is A Budget? <ul><li>A budget is a plan for managing money during a given period of time. </li></ul><ul><li>Income : Any money coming in </li></ul><ul><li>>What’s the difference between gross income and net income ? </li></ul>
  7. 7. What Is A Budget? <ul><li>Expenses : The money you spend on your needs and wants; Money going out </li></ul><ul><li>>What’s the difference between fixed expenses and variable expenses? </li></ul><ul><li>- Fixed expenses have set dollar amounts and are the exact amount every time (Ex: Rent or car payment) </li></ul><ul><li>- Variable expenses can change, which means you have more control over them </li></ul><ul><li>(Ex: What you spend on car gas or entertainment) </li></ul>
  8. 8. Benefits of a Budget <ul><li>Will help you live within your means </li></ul><ul><li>Can help you save toward important goals </li></ul><ul><li>Forces you to evaluate and modify your spending patterns </li></ul>
  9. 9. Personal Budget <ul><li>Two Main Parts: </li></ul><ul><li>Income </li></ul><ul><li>Expenses </li></ul><ul><li>One must balance the two in order to avoid debt. </li></ul>
  10. 10. Building Your Own Budget <ul><li>When you’re in control of your spending, you are able to make clear, planned decisions on the best way to spend your money and make your money work for you. </li></ul>
  11. 11. Building Your Own Budget <ul><li>Step 1: Consider Financial Goals </li></ul><ul><li>Write down long-term and short-term goals </li></ul><ul><li>Step 2: Estimate Income </li></ul><ul><li>Think about net income as well as other sources of income </li></ul><ul><li>Step 3: Estimate Expenses </li></ul><ul><li>Look at previous billing statements </li></ul><ul><li>Take note of fixed and variable expenses </li></ul>
  12. 12. Building Your Own Budget <ul><li>Step 4: Plan for Savings </li></ul><ul><li>Aim to save anywhere from 3 to 9 months’ income to cover emergencies </li></ul><ul><li>Further savings should be invested appropriately (consider a 50/50 plan ) </li></ul><ul><li>Step 5: Develop a Trial Budget </li></ul><ul><li>Fill out what you expect to earn and spend, then record actual income and expenses </li></ul>
  13. 13. The Envelope System <ul><li>1. Label an envelope for each spending category (savings, food, gas, entertainment) </li></ul><ul><li>2. Record the planned amount on the appropriate envelope </li></ul>
  14. 14. The Envelope System <ul><li>3. As you receive money, place the planned amount in each envelope </li></ul><ul><li>4. When you need to spend money, take cash out of the appropriate envelope </li></ul><ul><li>5. When an envelope is out of cash, you’re done spending for that category! </li></ul>
  15. 15. 5 Reasons to SAVE Your Money! <ul><li>Emergencies </li></ul><ul><li>Expensive Purchases </li></ul><ul><li>Recurring Expenses </li></ul><ul><li>Retirement </li></ul><ul><li>Special Goals </li></ul>