104 budget


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  • PRAYER:Your word tells us that Your people are destroyed for lack of “Knowledge.” Help us today to both give and receive knowledge about the things of this world. Your word also tells us that if we lack “Wisdom” we need only to ask and You will give it freely. We ask for Wisdom about how to use this Knowledge to be good and faithful stewards of all you have entrusted us with. Churches teach on tithes and offerings. Tithes are 10% of financial stewardship and offerings are part of the remaining 90%. We do not depend upon the world’s financial system, but learning how it works and disciplining our lives helps us become Faithful Stewards of all our finances. The objective of this series is empower people to become better financial stewards by helping them understand how the world’s financial system works and how to apply that information to their lives.Two weeks ago we talked about “Credit.” We looked at “Credit Reports” and “Credit Scoring.” Last week we took a look at the subject of “Debt”. What it is, how we get into debt and some things to help you deal with it.This week we are going to look at living disciplined lives and become Faithful Financial Stewards.
  • It can be painful!Reaching our goals requires focus and commitment.
  • Quit doing the things that stimulate your desire for things. Quit watching commercials.
  • Your materials include a form you can use in balancing your check book.
  • Your materials include a form that may be helpful.
  • Your materials include both a blank form as well as a sample one that has been filled out.It will help you monitor your progress.There is a feeling of accomplishment seeing your debts paid down.
  • Your Materials Include An “Estimated Monthly Budget.”There is no magic to this form and there are many other good forms.
  • It is merely a tool. An important tool, but, none the less a tool.
  • A lot of people do this.A friend of mine who is a Christian financial counselor tells me that of the people who come to him for help, only about 10% stay the course to the finish and actually get out of debt. They know that they are in trouble and want help, but the answer is more work than they are prepared to put forth.Ignoring personal financial issues will not make them go away!!!!
  • This is one I created after studying a number of other forms.
  • Comment on “Range” – No two families are the same. Priorities vary.
  • You start with historical numbers.Study these numbers to identify areas where you can cut back.As you live with a budget, regularly make adjustments to reflect the changes you are able to make in your spending habits.
  • If your monthly mortgage payment includes taxes and insurance, record it under mortgage payments or break those items out and record them under home insurance and property taxes.
  • “Stay-Cation”I recently heard it put this way: “What is under the tree is not as important as who’s around it!”
  • Minimize “Miscellaneous”
  • Do It!Don’t Quit!Be patient! If you have been accumulating debt for years it may take years to get out of debt!
  • Don’t be ashamed to get help!
  • 104 budget

    1. 1. Financial Literacy<br />Personal Financial Discipline<br />
    2. 2. Terms of use<br />Families and lives are destroyed from a lack of knowledge about personal finances. This is one of a series of Microsoft PowerPoint 2007 presentations intended to help people understand a variety of financial subjects from a Christian perspective. They are a work in progress created and <br />Copyright © 2009 By James C. Johnston<br />1364 Cordova Ave, Ft Myers, FL 33901<br />239.332.0028 All Rights Reserved<br />Use is subject to the following limitations:<br />You may try it for free;<br />You may give copies to others, as long as there is no charge for doing so;<br />If you find any mistakes or omission, have suggestions or make any changes in it, share them with the author so that appropriate corrections and additions can be made; and,<br />If you find them useful and you are moved to do so, you may make some financial contribution in recognition of the value of the time and effort that went into their creation and distribution, and to encourage updating and improving them.<br />Be Blessed!<br />
    3. 3. Personal financial discipline is . . .<br /> . . . the self imposed systematic modification of the way you think about money and your spending habits, with the goal of becoming a Faithful Financial Steward (and at the same time, live better for less , become debt free and save for the future).<br />It may require <br />Doing some things you don’t want to do, and<br />Refraining from some things you want to do.<br />
    4. 4.
    5. 5. review<br /> The Enemy of Faithful Financial Stewardship is raising your standard of living by accumulating consumer debt.<br /> The principle access to consumer debt is the “Credit Card.”<br /> Personal Financial Discipline requires taking control of your Credit Card and Shopping habits.<br />
    6. 6. Credit card highlights<br />Consider a debit card or pre-paid card.<br />Pay on time - all the time!<br />Pay-In-Full Monthly - If you can’t pay in full, always pay more than the minimum payment.<br />Don’t use credit cards for cash advances.<br />Don’t routinely carry your credit cards.<br />Use a credit card register to track spending.<br />Keep a “rainy day” credit card.<br />
    7. 7. shopping<br />Stop Recreational Shopping.<br />Plan to shop and Stick To The Plan.<br />Avoid temptation.<br />
    8. 8. Financial records . . . <br /> Financial Discipline requires gathering and both regularly updating and reviewing personal financial information.<br />
    9. 9. The starting point is Balancing yourcheck book<br />Most people are not good money managers and can’t even balance their check book.<br />
    10. 10. Listing debts<br />Most people don’t know who and how much they owe, which is essential to taking control of your debt issues.<br />
    11. 11. Debt repayment schedule<br />Developing a plan to repay debt and tracking progress is an important to financial discipline.<br />
    12. 12. Estimated Monthly Budget<br />An “Estimated Monthly Budget” is a helpful, if not an essential, means to Financial Disciplined.<br />
    13. 13. A family budget . . . <br />. . . is a tool to help monitor a family’s income and expenses by planning for expenses, savings and debt repayment.<br />
    14. 14. A Budget does Not . . . <br />Get you out of debt<br />Make your life better<br />Solve your problems<br />Constitute an end, in-and-of itself<br />
    15. 15. A budget can . . .<br />Offer a clearer picture of where money is going<br />Help “find money” by revealing waste, un-necessary expenditures and “leaks”<br />Provide information needed to set priorities and develop plans to reach goals<br />Reveal opportunities to increase income<br />
    16. 16. What you do with the information . . .<br />. . . IS UP TO YOU!<br />
    17. 17. You can ignore it . . .<br />And Stick Your Head In The Sand<br />
    18. 18. You can commit to . . .<br />. . . using the information to discipline your financial life – for the rest of your life!<br />Take a Stand!<br />
    19. 19. Who benefits from a budget<br />Everyone!<br />Some can get along without a budget<br /><ul><li>WEALTHY - They Can’t Spend It All
    20. 20. THRIFTY – They Will Not Spend It All
    21. 21. INTUITIVE BUDGETERS </li></ul>Even these do better on a budget<br />Most people who don’t budget eventually have financial troubles.<br />
    22. 22. A FAMILY BUDGET is . . .<br /> . . . A Family’s plan to manage the money that comes into their home.<br />Your Budget For Your Family ≠ Your Family Budget<br />
    23. 23. A FAMILY BUDGET<br />It accounts for all spending (including weekly, monthly, quarterly, semi-annual and annual items) so that money is put aside monthly to pay them as they come due. <br />Frequently expressed as a “monthly budget,” which is a “yearly budget” divided by 12.<br />
    24. 24. Estimated Monthly Budget<br /> An “Estimated Monthly Budget” is included in handouts.<br /> There are many other good forms.<br />
    25. 25. BUDGET guidelines<br />
    26. 26. BUDGET guidelines<br />
    27. 27. BUDGET guidelines<br />
    28. 28. BUDGET guidelines<br />
    29. 29. BUDGET guidelines<br />
    30. 30. Entering Financial information<br />Looking For 1/12th Annual Totals<br />Weekly Sums X 4.33 = Monthly Equivalent<br />Annual Sums ÷ 12 = Monthly Equivalent<br />Quarterly Sums ÷ 4 = Monthly Equivalent<br />
    31. 31. Three main parts of budget<br />Net Spendable Income<br />(Total Living Expenses)<br />Surplus or Deficit<br />
    32. 32.
    33. 33. As you record expenses . . . <br />Find A Place To Record Everything<br />Only Record Things Once<br />Look for opportunities to<br />Eliminate Expense Items Entirely<br />Reduce Those You Can’t Eliminate<br />Make a List of those areas where you can eliminate or reduce expenses<br />
    34. 34. Gross income<br />Salary<br />Interest<br />Dividends<br />Alimony/Child Support<br />Social Security & Public Benefits<br />Pension Benefits<br />Other Income<br />Giving<br />Taxes (Income Related)<br />
    35. 35. Living expenses (housing 25% - 38%)<br />Mortgage or Rent<br />Second Mortgage<br />Home Insurance<br />Property Taxes<br />Electricity<br />Gas<br />Water & Sewer<br />Garbage & Trash Collection<br />Telephone<br />Maintenance<br />Cleaning & Supplies<br />Association or Condo Fees & Assessments<br />Other<br />
    36. 36. Living Expenses (food)<br />Food (10% - 15%)<br />Eating Out<br />Transportation (10% - 15%)<br />Loan or Lease Payments<br />Gas & Oil<br />Insurance<br />Maintenance, Repair & Replacement<br />Other<br />
    37. 37. Living expenses (entertainment)<br />Entertainment & Recreation (4% - 7%)<br />Baby Sitters<br />Vacations<br />Pets<br />Other<br />Clothing (4% - 6%)<br />Savings & Investments (5% - 25%)<br />
    38. 38. Living expenses (insurance)<br />Insurance (3% - 7%)<br />Life Insurance<br />Medical Insurance<br />Disability Insurance<br />Other<br />Debts Except Auto (0% - 10%)<br />
    39. 39. Living expenses (medical)<br />Medical & Dental (4% - 8%)<br />Doctor<br />Prescriptions<br />Other<br />School & Child Care (5% - 10%)<br />Tuition<br />Day Care<br />Student Loans<br />Other<br />
    40. 40. Misc. Living expenses (4% - 8%)<br />Alimony & Child Support<br />Toiletries & Cosmetics<br />Laundry & Cleaning<br />Children’s Allowances<br />Subscriptions<br />Birthdays & Anniversaries<br />Weddings & Showers<br />Christmas Presents<br />Postage<br />Accounting /Legal Fees<br />Education<br />Other<br />
    41. 41. reconciliation<br />Net Spendable Income<br />­Total Living Expenses<br />Deficit<br />
    42. 42. If you have a deficit<br /> Identify Areas Where You Can Cut Back<br /> If You Can’t Pay All - Prioritize Obligations<br /> Secured Debt: Home Mortgage<br /> Auto Loans<br /> Unsecured: Small Balance<br /> High Interest<br /> “Rainy Day” Credit Card<br /> Get creative <br />
    43. 43. BECOME CREATIVE<br />“We just sat in the hot car for 6 hours and bickered. It was like taking a vacation, but we saved $1,000.<br />
    44. 44. reconciliation<br />Net Spendable Income<br />­Total Living Expenses<br />Surplus<br />
    45. 45. Suggestions for use of a surplus:<br />Create A Cash Reserve<br />Prioritize & Pay Off Debts<br /> Low Balance Accounts<br /> High Interest Debt<br /> Secured Debts<br /> Bankruptcy<br />Invest & Save<br />
    46. 46.
    47. 47. So we can worry<br />before we spend<br /> money rather than<br />after we spend it!<br />Why bother<br /> to budget?<br />
    48. 48.
    49. 49. Being debt free & in control is sweet <br />
    50. 50. Confused?<br />
    51. 51. Later Can Be Too Late!<br />
    52. 52. resources<br />Faith Fellowship<br />(239) 278-3638<br />Christian Financial Counseling<br />http://www.cfcswf.org/<br />(239) 337-2122 <br />