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Budgeting

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Unit 6 PP

Unit 6 PP

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Budgeting Budgeting Presentation Transcript

  • Unit 2 – B udgeting E mine SpendingHa s xa bit Sour ofIncome cesT ypes ofExpenses Impora ofSa ing (PY ) t nce v F Const uctaBudget r F ms ofRecor Keeping or d HowBudget Cha t oughoutL s nge hr ife
  • S pending Plan/B udget Ta yourspending show you w e yourmoneyis r ly r cking s her eal going. T tinfor t becomes ev mor v l bl w you ha maion en e aua e hen use itt cr t as pending plan or budg et. o eae  Seeing alyouropt a ma smat choices so you ca gett l ions nd king rer n he st you r lyw nt It lhel you find mor moneyfort impora uff eal a . ’l p e he t nt things.
  • S pending Plan/B udget Y budgetw lcha a yourincome gr s a yourpr it cha our il nge s ow nd ior ies nge.  R nowyou pr bl spend mostofyourmoneyon food, cl hes, ight oba y ot ent t inment era .  In 10yeas you’l pr bl spend mostofyourmoneyon r ing a r l oba y ent n a rmentorpa on ahome morga a ca pa s. pat ying t ge nd r yment  In a her10yeas, in a ion t t pr ious expenses, you’l pr bl not r ddit o he ev l oba y st r t sa e foryourchil en’s educaion a ar ir at o v dr t nd et ementfund.
  • S mart S pending Aspendingpl n al s you t pr it yourspending a a low o ior ize nd sa ing v  Ifyourspendingl show t tyou boughtabotl ofsodafor og s ha te $1 ev yda t t $3 amont M ybe you ca l e w hout er y, ha’s 0 h. a n’t iv it yoursoda butma t e’s somet el you’d r t spend , ybe her hing se aher $3 on. 0
  • How Do You S pend Your Money? Use yourspendingl fr t pr ious unitt caegor your og om he ev o t ize expenses a det mine t per you spend on ea caegor nd er he cent ch t y. Cr t apie chatt tr esent howyou spend yourmoney? eae r ha epr s
  • Part 1 of the E quation:Income Income: al a birhda money, selingyourst low nce, t y l uff, int esteaned on sa ings a er r v ccount j , ob  Payroll deduc tions – biggestae t xes, 4most r a common • F a Income T x eder l a • St t Income T x ae a • Socia Secur yT x l it a • M r Tx edicae a • T xes pa forav r yofser ices w use, r d ma ena publ a y aiet v e oa int nce, ic school amed ser ices, a r ir s, r v nd et ementincome fort el l he dery
  • Payroll deductions Federal Income Tax  F colect byt feder lgov nmentt suppor it pr a – Sentt t IR (Int na ee l ed he a er o t s ogr ms o he S er l R enue Ser ice) ev v S tate Income Tax  F colect bymostst t t hel pa forst t ser ices – Sentt st t r enue ee l ed aes o p y ae v o ae ev depat rment S ocial S ecurity Tax  A ied byt F a Insur nce Contibut A (FICA – Pr ides asmalincome a ppl he eder l a r ions ct ) ov l nd ot ser ices t t el l disa ed A ica a or ned minor her v o he dery, bl mer ns, nd pha s Medic are Tax  A ied byFICA– Pr ides medica insur nce t t el l a some disa ed A ica ppl ov l a o he dery nd bl mer ns
  • Gros s Income vs . Net Income Gros s income  T aa ot l mountofincome fr yourw ges orbefor a pa ol deduct om a e ny yr l ions. • Numberofhour you w k t yourhouryr t s or imes l ae Net Income  Once yourt xes ae deduct fr yourgr income you r a r ed om oss eceiv your“t ke- pa e a home y.” W4For - m  F l outw you st r aj it howt feder lgov nmentcacul t yourt x iled hen at ob, ’s he a er l aes a deductions.  KeypatofaW4for r - m • Line 5 “t a numberofal a ot l low nces” • M r a st t mor t n one j numberofchil en ait l aus, e ha ob, dr • T l ert numbert highert a he ow he he he mountoft xes w hhel a v v sa a it d, nd ice er . • Ift much t x is deduct fr yourpa you’l pr bl getar w you fil yourincome t xes in A il oo a ed om y, l oba y efund hen e a pr , ot w you’l end up pa al r a . her ise l ying age mount
  • Part 2 of the E quation:E xpens es E xpens e: w tyou spend moneyon – yourneeds a w nt ha nd a s  Fixed E xpens es – you knowexa l howmuch is needed ea cty ch mont h • M t ge/ent orga r • Ca l n r oa  Variable E xpens es – you ha e mor contolov howmuch v e r er t lbe hey’l • Gocer food r ies/  Periodic /Oc cas ional E xpens es – notpa ev ymont id er h • Ca insur nce (ev y6mont r a er hs) • A o r ir ut epa s
  • What Type of E xpens e Is It? Groceries ? periodic, variable Piano Les s on Fee? periodic/variable C able TV B ill? fixed Magazine S ubs cription Renewal? periodic, fixed C ar Loan Payment? fixed E lectricity B ill? variable Lis t 5 of your expens es and whether they are fixed, variable, or periodic
  • Pay Yours elf Firs t – “ PYF” Y don’tmiss yourmoneybeca it l you nev ha itin t ou use ’s ike er d he fir pl ce. st a  Sa e 10 or10cent forev y$1 you ma v % s er ke • Ha e moneyfora emer v n gencyfund • Eectonical deposityourpa l r ly ycheck a a foracera a / centgo nd sk t in mountper int yoursa ings a o v ccount A omaic sa ings depositfor -ta s acera a ut t v m r nsfer t in mountof moneyfr yourchecking t yoursa ings a om o v ccountonce amont h
  • S aving to Meet G oals The S imps on family wants to buy a new refrigerator for their kitc hen. Mr. S imps on has vis ited s everal s tores and es timates that it will c os t around $700 to buy and ins tall the type of refrigerator the family wants . If their goal is to buy it in s ix months , how muc h do they need to s ave eac h month?  $700 / 6 = $116.67 The Mencias want to buy their oldes t daughter a c omputer to take to c ollege next year. They’ve s hopped around and think they can get a good des ktop computer with all the s oftware and a printer for about $1,100. With 15 months to s ave, how muc h do they need to s et as ide eac h month?  $1,100 / 15 = $73.33
  • S aving for My Goals L a yourper lfina lpl n fr t pr ious unit ook t sona ncia a om he ev , ident ify:  T t aa he ot l mountyou need t sa e forea SM R goa. o v ch A T l  T a he mountyou need t sa e ea mont w t meetea SM R o v ch h/ eek o ch A T goa. l
  • Keeping Track – GettingOrganized Checking accountst t s: baa check book ev ymont w you r e your aement l nce er h hen eceiv st t aement Sa ings a inv mentst t s v nd est aement Pa st empl s ca ma mist kes, doubl check t sa e fort xes y ubs: oyer n ke a e- hen v a T x document keep copies ofalt W2s you r e a a t x document forchecking, a s: l he - eceiv nd ny a s sa ings, a inv ment a v nd est s ccount s. Insur nce st t s a aement L n a cr cad st t s: showyourpur ses, pa s, fina chages, a oa nd edit r aement cha yment nce r nd curentbaa doubl check t sa e fora l stayea r l nce, e- hen v t ea r R s a w ra ies forbig-icketit forexa e r s fr acomput , bike, eceipt nd ar nt t ems: mpl eceipt om er el r ectonics, ca r ir et Keep alma l a w ra ybookl s t r epa s, c. l nuas nd ar nt et oo
  • S teps to B uilding aB udget Decide t t fr me – mont w he ime a h, eek E imae yourincome – br k dow in t caegor st t ea n o t ies Caegor yourexpenses – fixed, v r bl per t ize aia e, iodic Subta expenses fr income – ifit negaiv r ev l t a a ust r ct om ’s t e, e- auae nd dj yourexpenses, ifit posit e, t a a mor t yourPY l ’s iv hink bout dding e o F ine
  • Vocabulary S pending Plan or B udget  Apl n forma gingyourmoneydur agiv per ort a na ing en iod ime Income  A moneyyou r e ny eceiv Payroll Deductions  M subt a ed byyourempl s, foranumberofit befor wit you t check oney r ct oyer ems, e r ing he Taxes  F t tsuppor gov nmentpr a a ae r ed byl wt be a ied t income, pr t orgoods ees ha t er ogr ms nd r equir a o ppl o opery, Federal Income Tax  F colect byt feder lgov nmentt suppor it pr a a sentt t Int na R enue Ser ice (IR ee l ed he a er o t s ogr ms nd o he er l ev v S) S tate Income Tax  F colect t hel pa forst t ser ices a sentt t st t r enue depat ee l ed o p y ae v nd o he ae ev rment S ocial S ecurity Tax  Pr ides asmalincome a ot ser ices t t el l disa ed A ica a or ned minor a sentt t Socia ov l nd her v o he dery, bl mer ns, nd pha s nd o he l Secur yA it dminist aion aongw h amaching a r t l it t mountpa byt empl id he oyer Medicare Tax  Pr ides medica insur nce, aso t t el l a t some disa ed A ica a sentt t Socia Secur y ov l a l o he dery, nd o bl mer ns nd o he l it A dminist aion aongw h amachinga r t l it t mountpa byt empl id he oyer
  • Vocabulary Gros s Income  T aa ot l mountofincome fr yourw ges, befor a pa ol deduct om a e ny yr l ions Net Income  “T ke- a home pa – a y” mountyou’’ be a e t deposit once yourempl ha deduct t xes fr yourgr bl o , oyer s ed a om oss income E xpens es  W tyou spend moneyon – yourneeds a w nt ha nd a s Fixed E xpens es  Costt sa a he me mountev yter ime Variable E xpens es  Fl uae in a uct t mount Periodic/Occ as ional E xpens es  Y don’tpa ev ymont ca eit be fixed orv r bl ou y er h, n her aia e PYF – “ Pay Yours elf Firs t”  W henev you r e money, you shoul immediael putacera a er eceiv d ty t in mountint a a o n ccountt tyou w lset ha il a t use l t t meetal t m fina lgoa. side o aer o ong-er ncia l