Budgeting
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This document provides information about creating and managing a budget. It discusses tracking expenses, distinguishing needs from wants, and understanding fixed versus variable costs. Key steps include identifying income sources, tracking spending for a month, deciding what is a need versus a want, creating a realistic spending plan within one's means, and living within one's income to achieve financial goals and avoid unnecessary debt. The overall message is that learning to live within one's budget through expense tracking and prioritization is the secret to financial success.
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Budgeting
- 1. Budgeting • Learning the importance of tracking where your money goes Association of Financial Educators
- 2. Objectives • Learn the facts about money. • Tracking where your money is spent. • Understanding your expenses. • Distinguish wants from needs. • Making a budget work for you.
- 3. The Facts about Money • Understand that every person and/ or household has a limited amount of money, despite income. • Learn to prioritize: What to buy now, what to buy later and what to do without.
- 4. Why take a look at your budget? Your money is your future! • Managing your money is possible and easier than you may think. • Reaching your goals can be a reality. • Avoiding unnecessary debt is possible.
- 5. Where to Begin… • Take a close look at your financial obligations and current spending. -Determine your overhead cost on fixed expenses
- 6. Fixed Expenses • Housing • Utilities -Electric -Gas -Phone -Cable -Water -HOA • Outstanding debt payments • Day care/ tuition • Insurance- Auto/ Mortgage • Transportation expenses
- 7. Variable Expenses • Clothes • Food • Entertainment • Gifts & Celebrations
- 8. The Choices we Face: Is it Necessary? • iPod® • Going out to eat • Concert tickets • New boots • New clothes • Cable TV • Internet • Manicure • New car • Vacation
- 9. Wants Versus Needs • Understanding the difference between a necessity and a desire can help you manage your spending. • Controlling your budget means making decisions. There will never be enough money for all your needs and wants.
- 10. Small Spending Can Add Up! 1 Starbucks® drink@ $3.50 $3.50 x 7 days = $24.50 $3.50 x 365 days = $1,227.50 1 Sonic® burger @ $4.25 $4.25 x 7 days = $29.75 $4.25 x 365 days = $1,551.25 1 carton of cigarettes @ $80.00 $32.00 x 12 months = $960 $32.00 x 52 weeks = $4,160.00
- 11. Alternative Options to Scale Back Expenses • Public transportation • Carpool group • Downgrading utility bills -Cable package, phone • Attend free events • Grind your own coffee beans • Cook meals at home • Shop at discount stores • Use coupons
- 12. The Secret to Financial Success…. • Learning to live within your income and budget!
- 13. Key Steps to Establishing and Managing Your Budget • Identify all sources of income and calculate the monthly take home • Track all spending for a month. • Decide what is a want and what is a need and re-evaluate. • Create a spending plan that is realistic. • Live within your income.
- 14. Thank you!! • Thank you for attending our Workshop! Please hand in your assessment form and feel free to sign up for a complimentary consultation!