Budgeting 101

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Budgeting 101

  1. 1. BUDGETING 101 Tips to help you begin budgeting
  2. 2. WHAT IS A BUDGET? WHAT WILL IT DO FOR ME ? <ul><li>Budget - An itemized forecast of an individual's income and expenses expected for some period in the future 1 </li></ul><ul><li>Budgets are an essential tool for tracking where all your earned income is going </li></ul><ul><li>Budgets help determine where we are spending more money than necessary </li></ul>1 - http://www.investorwords.com/600/budget.html
  3. 3. SOME BASIC BUDGETING TIPS… <ul><li>Budgets are a necessary evil </li></ul><ul><ul><li>It’s the only way to truly monitor where you are spending your money </li></ul></ul><ul><li>Watch out for cash leakage </li></ul><ul><ul><li>Watch out for many trips to the ATM; if your money is disappearing quickly, make sure you know where it’s going </li></ul></ul>
  4. 4. … A FEW MORE TIPS <ul><li>Spending beyond your limits is dangerous…it can lead to overwhelming debt </li></ul><ul><li>Never count on a bonus, promotion, raise, or investments </li></ul><ul><li>Beware of luxuries dressed up as necessities </li></ul><ul><ul><li>If you income doesn’t cover your costs, then some of your spending is probably for luxuries (even if you don’t consider them to be so) </li></ul></ul>
  5. 5. GETTING STARTED…WHAT DO I DO FIRST? <ul><li>Identify how you’re spending your money now… </li></ul><ul><ul><li>Look through current records of where and what your spending your money on </li></ul></ul><ul><ul><li>Keep a journal of all your spending for a week…every small cup of coffee at the Bean & Bagel adds up! </li></ul></ul>
  6. 6. NOW I KNOW WHERE I’M SPENDING MY MONEY, WHAT DO I DO? <ul><li>Review where you’re spending your money and decide how to break each dollar spent into a category </li></ul><ul><li>How much money are you spending on snacks, coffee, beer, etc? </li></ul><ul><li>How much money are you spending on gas? How often do you fill up your tank? </li></ul><ul><ul><li>You will have to use average price </li></ul></ul><ul><ul><li>Always assume the higher end of the bill…you never know if gas is going to go up in a week </li></ul></ul>
  7. 7. CATEGORIZE YOUR EXPENSES <ul><li>Rent / mortgage </li></ul><ul><li>Utilities </li></ul><ul><li>Cell Phone </li></ul><ul><li>Cable </li></ul><ul><li>Telephone </li></ul><ul><li>Car payment </li></ul><ul><li>Loan payments </li></ul><ul><li>Insurance payments </li></ul><ul><li>Parking (meters, permits, tickets) </li></ul><ul><li>Groceries (food and paper goods, tobacco, etc.) </li></ul><ul><li>… Etc. </li></ul><ul><li>Gas </li></ul><ul><li>Entertainment expenses (alcohol, movies, tickets, etc) </li></ul><ul><li>School supplies </li></ul><ul><li>Clothing </li></ul><ul><li>FIXED EXPENSES (they remain constant from month to month) </li></ul><ul><li>VARIABLE EXPENSES (the expenses exist every month, but the amount varies) </li></ul>

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