Presentation on Personal Finance and Budgeting

1. Money Management
The Road to Freedom
Instructor: Jeff Wilson II, CPA,
AFC, CFE
Personal Finance Counselor

2. Budgeting Principles
 Budgeting is not a goal ; it is a solution to a goal
 Pay yourself first
 The more automatic, the easier budgeting will be
 Don’t tempt yourself; No need to test your
willpower
 Budgets should be made with your goals/direction
in mind
 Be Realistic

3. The Budget Process
1. Set Goals
2. Track Expenses
3. Develop your Budget/Spending
Plan
4. Budget Evaluation

4. Goal Setting: What is the Direction of your
Compass?

5. Setting The Direction Of Your
Compass
 Identify the financial goals that are important to
you
 What’s the best estimate of what your goal will
cost
 What’s your time frame for achieving your goals
 What types of investments may be appropriate
for accumulating the money you need

6. Budget Methods
 The Envelope Method-This method is effective for
expenditures made primarily with cash. Budget
money is placed in envelopes to organize funds.
 Mobile App Method-Use an mobile app to
automate the budgeting process (i.e. Mint, Level
Money, Expensify)
 Checkbook Method-Use the checkbook register
to record purchases and income to control
spending
 Spreadsheet/Post-it Method- A notebook or
spreadsheet is used to record income and
expenses on a daily basis

7. The Envelope Method
For this budget method, every
paycheck, you put money into
different envelopes marked for
your expenses (i.e. groceries,
clothes, entertainment,
savings etc.)
The key to this method is you
can only spend money in the
envelopes and no more.Pros:
•The system forces you to make a
budget
• Using cash is easier to control
spending than cardsCons:
•Cash only system may not work well
for emergencies
•Can’t reserve vacations or hotels with
cash

8. Mobile App Method
Pros:
•Using an app, makes it so that
your budget and budget reminder
is always with you.
•Apps can sound off alarms
during purchases to stop
spending at point of sale.
Cons:
•With mobile there is always a
security risk.

9. Checkbook Method
One the earliest forms of
accounting and budgeting for
funds. The key to this budget
method is to track every dollar
that passes in and out of your
life in your checkbook ledger,
whether or not it went through
your checking account.
Pros: If kept up to date,
you will know how much
your cash balance is at any
time
Cons:
• In a more connected world, an
app may be more convenient
than some.
•Checks are not written as much
these days to pay bills.

10. Spreadsheet Method

11. Developing A Budget
Track your Prior Months Expenses

12. Develop Your Budget

13. Budget Evaluation
 Analysis/Calculation:
 Savings Ratio- Determines the number of months
your savings could meet your monthly expenses
if your income suddenly stopped. (Recommends
3 to 6 months of savings)

14. Budget Evaluation
 Analysis/Calculation:
 Debt Payments to Income Ratio- Divides
disposable income to monthly debt payments to
determine if non mortgage debt is too much.

15. Questions, Comments, or
Concerns?
Contact Information: Jeff Wilson II, CPA, AFC, CFE
Email: jwilson@wiicpas.com
Web address: http://www.wiicpas.com