The document provides information about budgeting and personal finances. It discusses that the average person spends money 3 times per day and common daily expenses like soft drinks can add up to hundreds per year. It emphasizes that having a budget is important to avoid money problems and control spending. The key aspects of creating a budget are to track income, categorize expenses as fixed, variable or periodic, and ensure expenses do not exceed income each month. Paying yourself first by saving 10% of income is also recommended. Implementing a budget requires monitoring spending using methods like cash envelopes or a checking register to stay on track financially.

1. Budget
How to budget your money?

2. “Some Money Facts”
►$ The average person spends money three
times a day.
► $ A movie with popcorn and a soft drink
can easily cost $20
► $ Just one soft drink a day for .99c adds
up to $361.35 in a year
► $ What’s the biggest expense item for
teenagers? FOOD!

3. Money Matters:
► How many times a day do you spend money?
► The average person spends money 6 times a day.
► Money brings happiness – Money problems bring
unhappiness
► Money problems stay with you for the rest of your
life.
► Top reason for divorce is financial. Finances
affects everything else in your life.

4. Ways to improve your finances
► Make more money
► Cut your expenses
► “Wait and win the
lottery” system
► Have a budget

5. What is a budget?
►A tool to manage your money
► For a specific period of time – usually
monthly
► Budget due to our limited resources
► Helps us meet our responsibilities and
our financial goals

6. Reasons for a Budget
 Track spending
 Money toward expenses/bills
 Avoid careless spending
 Eliminates stress
 Live within your means/income
 Meet financial goals
 Save
 Invest
 …Puts you in control of your financial future,
beginning NOW.

7. Without a Budget…
 Have no plan
Paycheck-to-paycheck
Come up short
Plan for emergencies
No savings/investing plans
 Less likely to know what $ you have

8. How to Build a Budget
1. Decide on a time frame for tracking expenses
(monthly)
2. List all money you have coming in (income)
A. Disposable income
B. Discretionary income
3. PYF (Pay yourself first) = Savings
4. Make categories for all expenses
5. Subtract total expenses from income
6. Study budget and make changes

9. PAY YOUR$ELF FIRST!
Every time you PYF, you are developing a
saving habit that leaves you with more
money to spend later on for things that are
really important to you!
Save 10% of your disposable income each
time you get paid

10. Budgeting Terms
► Expenses:
► Budget – tool for  Fixed expenses –
money management monthly contractual
► Disposable income –  Variable expenses –
after taxes not contractual, vary
► Discretionary income – each month
after all expenses paid  Periodic fixed
expenses

11. Spending plan activity
► Decide if each item is income, a fixed
expense, variable expense or periodic
expense

12. Spending plan activity
Rent
Fixed expense
Wages
Income

13. Spending plan activity
Groceries
Variable expense
Internet bill
Fixed expense

14. Spending plan activity
Tips
Income
Utilities
Variable expense

15. Spending plan activity
Gift from family
Income
Savings
Fixed expense - PYF

16. Spending plan activity
Automobile registration
Fixed expense
Eating out/Snacks
Variable expense

17. What is included in a budget for a
family in a given month?
The typical family spends their money on:
►Housing - 30%
►Transportation - 20%
►Food -15%
►Utilities, Home Improvements - 14%
►Saving - 10%
►Insurance - 7%
►Other - 4%

18. What does it look like?
Budget Template
Income Amount
Wages $
Total Income $
Expenses Amount
Fixed Expenses
PYF (10%) $
Variable Expenses $
Periodic Expenses $
Total Expenses $
Net Gain or Net Loss $

19. Allocate money to each category
► Net gain - $ remaining to either save, spend or invest
► Net loss - spending more money than earning and has to
use credit (borrowed money) to meet their financial
obligations
► A spending plan should have income and expense
matching one another (reach zero)

20. Implement and Control
► There is not one correct control system.
Depends upon the individual/family
 Envelope systems – individuals place the actual
budget amount of cash from a paycheck into a
specific envelope system for the expense
 Check register system – helps consumers to track
all expenditures in a checkbook register which has
been divided into spending plan categories
 Electronic spending plan systems – multiple
types of software are available for consumers to use
to help keep track of their financial records like
www.mint.com

21. Net worth statement
► A net worth statement describes an individual or
family’s overall financial condition on a specified date
► The components include:
 Assets – Everything a person owns with monetary value
 Liabilities – Debts or what is owed to others
 Net worth - The amount of money left when liabilities are
subtracted from assets (indicates wealth)

22. Who is Wealthier?
John – earns $35,000 Alex – earns $100,000
per year per year
Assets Assets
Home $60,000 Home $75,000
Retirement $24,000 Retirement $35,000
Automobile $8,000
Automobile $8,000
Total Assets $118,000
Total Assets $92,000
Liabilities
Liabilities
College loan $10,000
College loan $6,000 Automobile loan $4,000
Mortgage $35,000 Credit card debt $20,000
Total $41,000 Mortgage $65,000
Liabilities Total Liabilities $99,000
Net Worth $51,000 Net Worth $19,000

23. ANY QUESTIONS?