Training 1 Basics of budget

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Training 1 Basics of budget

  1. 1. B E I L E F Planning & Budget Anyone can do it! 26/09/2013 1Clarity Accounting and Business Services
  2. 2. Disclaimer This document contains general information only. It does not contain any recommendations, statements of opinion or advice. The information provides a general introduction to Budgets and managing your finances. You should obtain independent advice which is suitable to your objectives, financial situation and needs. - Clarity Accounting and Business Services 26/09/2013 2Clarity Accounting and Business Services
  3. 3. To believe, one must have a firm conviction as to the reality or goodness of something. 26/09/2013Clarity Accounting and Business Services 3
  4. 4. To believe and to have confidence, work hand in hand and have a direct correlation to achieving something great. 26/09/2013 4Clarity Accounting and Business Services
  5. 5. Which is faster … the FOX OR The RABBIT? 26/09/2013 5Clarity Accounting and Business Services
  6. 6. The Fox is running for his dinner … The Rabbit is running for his life ... 26/09/2013 6Clarity Accounting and Business Services
  7. 7. What does it take to really believe that you can achieve your financial goals? Success 26/09/2013 7Clarity Accounting and Business Services
  8. 8. Establish a savings habit …. Understand and practice…. • Plan • Budget • And • Save as much regularly as you can. 26/09/2013 8Clarity Accounting and Business Services
  9. 9. What is Planning and Budgeting? Isn’t that something Only large companies do? Why do I need it? 26/09/2013 9Clarity Accounting and Business Services
  10. 10. Budget Planner…. 26/09/2013 10Clarity Accounting and Business Services
  11. 11. What is Budget?? 26/09/2013 11Clarity Accounting and Business Services
  12. 12. Budget Planner…. Know where your money goes…either on a weekly, fortnightly or monthly basis. Write down all your income and all our expenses. Make sure that your numbers are for the same period. Consider all expenses even if they are small. We will see Mary MacDonald’s scenario. 26/09/2013 12Clarity Accounting and Business Services
  13. 13. 26/09/2013 13Clarity Accounting and Business Services Mary MacDonald Mary MacDonald (30 years of age) who lives in her own house in Kellyville. She is a Director of a ASX listed company. Mary is single and has completed her University education. Mary had no other debts and her last month’s budget gave her savings of $ 485. 00
  14. 14. 26/09/2013 14Clarity Accounting and Business Services Mary MacDonald Mary has recently upgraded her furniture which puts her on additional monthly payments of $ 1,000 and credit card payment $650. Now her total monthly expenses are more than her income by $765.00 Compare Mary’s monthly budget to see her financial position.
  15. 15. 26/09/2013Clarity Accounting and Business Services 15 Mary MacDonald's Monthly Budget Income Type of Income Amount received each period Work out your regularIncome Salaryor wage (after tax) Pension or Government allowance $ 6,600.00 Child support or other payments $ - Regular interest from savings $ 50.00 Regular income from investments $ 1,200.00 (such as rent from an investment property, distributions from a managed fund, or dividends from shares) Other misc income Total income $ 7,850.00 Household Expenses Amount received each period Education Expenses Amount received each period Work out your regularexpenses. School fees $ - Rent $ - University /TAFE (own) $ 300.00 Repairs $ 800.00 Tuition Gas $ 60.00 Books uniforms Electricity $ 250.00 Camps/excursions Water $ 120.00 Points to remember: Telephone/mobile $ 450.00 Sub Total (b) $ 300.00 Council Rates $ 260.00 Debt Repayments Use the same time frame that you chose for your income. Body corporate fees $ - Mortgage $ 2,800.00 Internet $ 75.00 Car loan $ 600.00 Cable/TV $ 50.00 HECS or HELP payments $ - Furniture $ - Credit Cards $ 200.00 Appliances Personal loans $ - Groceries $ 1,000.00 Store cards $ - Gardening $ 400.00 Lay-bys $ - Sub total (a) $ 3,465.00 Sub Total ( C) $ 3,600.00 Next, add up the subtotals to get your total expenses. Total Expenses i.e. Household expenses Education + Debt repayments (a)+(b)+ ( c) $ 7,365.00 Total Income Less Total Expenses = surplus/Deficit $ 485.00 Mary MacDonald's Monthly Budget Income Type of Income Amount received each period Work out your regularIncome Salaryor wage (after tax) Pension or Government allowance $ 6,600.00 Child support or other payments $ - Regular interest from savings $ 50.00 Regular income from investments $ 1,200.00 (such as rent from an investment property, distributions from a managed fund, or dividends from shares) Other misc income Total income $ 7,850.00 Household Expenses Amount received each period Education Expenses Amount received each period Work out your regularexpenses. School fees $ - Rent $ - University /TAFE (own) $ 300.00 Repairs $ 800.00 Tuition Gas $ 60.00 Books uniforms Electricity $ 250.00 Camps/excursions Water $ 120.00 Points to remember: Telephone/mobile $ 250.00 Sub Total (b) $ 300.00 Council Rates $ 260.00 Debt Repayments Use the same time frame that you chose for your income. Body corporate fees $ - Mortgage $ 2,800.00 Internet $ 75.00 Car loan $ 600.00 Cable/TV $ 50.00 HECS or HELP payments $ - Furniture $ 1,000.00 Credit Cards $ 650.00 Appliances Personal loans $ - Groceries $ 1,000.00 Store cards $ - Gardening $ 400.00 Lay-bys $ - Sub total (a) $ 4,265.00 Sub Total ( C) $ 4,050.00 Next, add up the subtotals to get your total expenses. Total Expenses i.e. Household expenses Education + Debt repayments (a)+(b)+ ( c) $ 8,615.00 Total Income Less Total Expenses = surplus/Deficit -$ 765.00
  16. 16. 26/09/2013 16Clarity Accounting and Business Services Mary MacDonald Mary had no other debts and her last month’s budget gave her savings of $ 485. 00 Mary has recently upgraded her furniture which sets her budget to deficit. Now her total monthly expenses are more than her income by $765.00 What if Mary’s Wedding is coming up ? Will her income increase in the same proportion of her expenses? What if Mary is expecting a child?
  17. 17. Let’s see how we are managing on monthly basis? Please fill out the Budget Planner which is given to you. See where each of us stand. Activity time: 5 minutes. How about a group activity? 26/09/2013 17Clarity Accounting and Business Services
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  19. 19. 26/09/2013 19Clarity Accounting and Business Services
  20. 20. Are you spending more than what you earn? 26/09/2013 20Clarity Accounting and Business Services
  21. 21. 26/09/2013 21Clarity Accounting and Business Services
  22. 22. If you are spending all of your Income ( or even more), your budget can show you where you need to change your spending habits. See which expenses are essentials and which one are extras. It is your budget, so you decide what you think is essential and what you might be able to spend less on. If you have surplus money, think about how that money could be used. Getting debt under control is important, and you might choose to increase your loan or credit card repayments. Or you could organise a regular deduction into a separate savings or investment account. Whatever you do, make sure that you put any extra money to good use. 26/09/2013 22Clarity Accounting and Business Services
  23. 23. It begins with you and your ability to … Put yourself in charge to have a plan for your money and stick to it. Prepare a budget for yourself and keep it up to date. 26/09/2013 23Clarity Accounting and Business Services
  24. 24.  Reward yourself for new skills!  Improve Self Discipline  Improve your finances  Plan for your dream holidays  Know every single benefit there is to know about your finances  Plan for your future Have you learnt new skill? Will you do budget? If your answer is YES, There are many reasons why should get excited.. 26/09/2013 24Clarity Accounting and Business Services
  25. 25.  Take a hard look at your loans and credit cards and see what scope there may be to consolidate them or adjust some of your spending habits.  Look for opportunities to make your money work harder by investing, and check if you’re contributing enough to your superannuation.  Think about strategies for protecting your money, such as making sure that you have the right insurance.  Shop around and get information and advice if you’re not sure about managing your money or if you need help. 26/09/2013 25Clarity Accounting and Business Services
  26. 26. A few simple things done regularly can make a real difference… • Expect to make a positive change. • Save rather than spend • Treat disappointments as stepping stones 26/09/2013 26Clarity Accounting and Business Services
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  28. 28. Revisit your plan and budget…. Make necessary changes to save more….. 26/09/2013 28Clarity Accounting and Business Services
  29. 29. Spending habits are difficult to change. People often become confused… and simply switch off their interest. Change? 26/09/2013 29Clarity Accounting and Business Services
  30. 30. People have many different priorities, but one common interest - Savings. A budget helps to achieve that goal. 26/09/2013 30Clarity Accounting and Business Services
  31. 31. You may have to wait a week, a month, sometimes a year or more but… You FINALLY get your financial freedom 26/09/2013 31Clarity Accounting and Business Services
  32. 32.  Anticipate that things will go wrong.  Mentally be ready to accept total responsibility for your own actions.  Set clear goals and deadlines for reaching objectives.  Seize every available opportunity, Create ones when none exists. 26/09/2013 32Clarity Accounting and Business Services
  33. 33.  Analyze what went wrong  Develop a “Plan B”  Stay in touch  Know your earnings limit.  Always make efficient use of your earnings.  Develop excellent savings habit. 26/09/2013 33Clarity Accounting and Business Services
  34. 34. Planning for unexpected expenses 26/09/2013 34Clarity Accounting and Business Services
  35. 35. ATO Guide – Understanding your money More Information Visit www.ato.gov.au 26/09/2013 35Clarity Accounting and Business Services Thank you for your valuable time and your feedback.

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