2. Money Management: Budget + Planning
SMART
Goals
01
Needs
vs.
Wants
02
Income
+/-
Expenses
03
Savings
plus
Interest
04
It’s All About
the Benjamins
05
3. What is a budget?
• The aim of a budget is to estimate
and plan current and future cash
expenses.
• Budgets are important for planning,
tracking, and sticking (to) a financial
goal(s).
6. Research
What might you take into
Consideration
when you buy something?
What features
of this product
are most
important for
my needs?
my wants?
What quality
do I want?
What quality
do I actually
need?
Are there
discounts or
sales that can
help me save?
Have I tried
comparison
shopping?
What is my
budget?
7. Price Comparison
Search the internet for your goal and
compare the prices on at least three
(3) similar quality, and quantity item.
Add the estimated cost to the
SPECIFICS section of your SMART
Goal worksheet. Filling in any other
necessary details, such as taxes, fees,
or insurance, as needed to get a more
accurate estimated total purchase
price.
9. Vocabulary Words
How can you use these words in an example sentence?
Budget: A budget is a plan for your
spending during a set period. A budget
should be based on your income and
ensure you spend less than you make.
Expenses: An expenditure of money; a
cost.
11. What Are Wants vs. Needs?
Needs
• Rent or mortgage
• Utility bills
• Healthcare and/or therapy
• Medication
• Food
• Work uniform
• Transportation/Commuting
Wants
• Entertainment
• Dining out
• Home purchases
• Travel
• Electronics
• Monthly subscriptions or memberships
• TV or music streaming accounts
• New clothing
When you fill out a budgeting worksheet, you categorize your spending as either wants or
needs. This separates your expenses into what is absolutely necessary for your well-being and
survival (needs) compared to what you would like to have but do not require (wants).
12. "Needs" That Are Really "Wants"
• Cable or Satellite TV
• Internet
• Dining Out - Restaurants
• Fast Food/Casual Eateries
• Clothing
• Gym / Fitness Club
• Beauty Products
• Subscriptions (magazine, Netflix, etc.)
• Professional / Club dues
• Hobbies and Sports
• Lessons (Music, Art, etc.)
• Holidays and Gifts
• Charitable Donations
The line between wants and needs is sometimes
blurry, and it can be hard to separate out which
expenses belong in which category. There can be
different reasons for this.
Most budget overspending occurs within the
“needs” that are really “wants” category often
called discretionary expenses. You may not have
thought about how much your gym membership
costs, how much you were spending dining out or
on morning coffee. However, if you're trying to
save for a house and are trying to figure out why
you have no money left at the end of every month,
it pays to scrutinize your discretionary expenses.
14. Income Types
Earned Income: income stream through a job.
Profit Income: by selling for more than the cost.
Interest Income: compound interest to gain a passive income.
Dividend Income: when you buy shares in a company
Rental Income: property. investment
Capital Gains Income: buying and selling assets; stocks and shares.
Royalty Income: making something unique and charging to use it.
18. Vocabulary Words
How can you use these words in an example sentence?
• Bank Account: Funds deposited in a bank that are credited to and subject to withdrawal by the depositor.
• Cash Flow: The cash receipts or net income from one or more assets for a given period, reckoned after taxes and other
disbursements, and often used as a measure of corporate worth.
• Credit Card: A plastic card, with a magnetic strip or an embedded microchip, connected to a credit account and used to buy goods or
services. It's like a debit card, but money comes not from your personal bank account, but the bank lends money for the purchase
based on the credit limit. Credit limit is determined by the income and credit history. Bank charge APR (annual percentage rate) for
using of money.
• Debt: Something owed, such as money, goods, or services. An obligation or liability to pay or render something to someone else
• Discretionary: Available for use as needed or desired
• Expenses: Something spent to attain a goal or accomplish a purpose.
• Interest: The percentage of an amount of money charged for its use per some period of time (often a year).
• Loan: A sum of money that is lent, usually with an interest fee.
25. Vocabulary Words
How can you use these words in an example sentence?
Discretionary
Spending:
Money that is available
for use as needed or
desired.
Cash Flow:
The pattern of income
and expenditures, a
person has resulting
availability of cash.
Negative Cash Flow:
Refers to the situation
when your cash
spending is more than
cash generation.
26. Saving is essential to building
your long-term wealth, and it is
important to save early in life
and often. Regardless of your
age, you should save a
percentage every time you
receive money, whether it’s from
a paycheck or a monetary gift.
The everyday decisions you make
about money can have a lifelong
impact. Saving allows you the
freedom and flexibility to fulfill
your goals and helps you develop
good personal finance habits.
$aving
DAY 4
27. Types of Saving Account
• Basic bank savings accounts offer the lowest interest rates, usually less than 1 percent. They come with
few restrictions on access to your money, and they don’t usually have required minimum balances. These
accounts associated with brick-and-mortar banks also can be accessed online.
• Money market accounts are high-yield accounts that pay interest based on the current market rates. They
are likely to require a higher minimum balance than a basic bank savings account.
• Online savings accounts are typically similar to basic bank savings accounts, but they offer higher interest
rates because they operate online and don’t involve the overhead that standard banks have.
• Credit unions are like banks, but they’re owned by their members and may offer higher interest on savings.
• Automatic savings plans are options you can set up for your savings account. You can choose to
automatically transfer a set amount from your checking account to your savings account every month.
28. $aving
• The longer you leave
your savings untouched in
a bank, the more your
money will grow. Limiting
how often you withdraw
money from your savings
account and only doing so
if you really need it.
29. 5 Tips for $aving
1. Make savings a priority. Each time you’re paid, put a portion of it toward savings. Saving money is a good
habit no matter how much or how little you put away each month.
2. Automate your savings. Most financial institutions allow you to automatically transfer funds online or via
mobile apps from checking to savings accounts.
3. Find money to save. Keep track of everything you spend for a week – you’ll be surprised where the
money goes. Adjust your spending habits a little and suddenly, you’re saving.
4. Keep the change. Some supermarkets have machines that count your coins and give you cash in exchange
for a small fee. Gather up your spare change, pour it into the kiosk and see how much your coins add up
to. Instead of spending it right away, consider diverting your newfound funds to savings.
5. Cancel extra costs. Check to see if you have any old subscriptions that you’re not using anymore –
whether it’s to a gym, magazine, or streaming service that you no longer use. Many services that you may
no longer want could cost you hundreds of dollars per year.
30. Compound
Interest
Compound interest can
have a dramatic effect on
the growth of regular
savings and initial lump
sum deposits. Determine
how your savings will
grow by analyzing your
financial habits.
34. What Are The Values In
Monitoring Spending Habits
and Tracking $avings?
35. Vocabulary Words
How can you use these words in an example sentence?
Bank Account: A fund deposited by a
customer (the depositor) in a bank
from which they can make
withdrawals.
Compound Interest: Interest
computed on the accumulated unpaid
interest as well as on the original
principal. Interest, as on a loan or a
bank account, that is calculated on the
total on the principal plus
accumulated unpaid interest.
Expenditures: An expense.
Interest: The percentage of an
amount of money charged for its use
per some period of time (often a
year).
Investment: Property or another
possession acquired for future
financial return or benefit.
Savings Account: A bank account
designed for a client's savings, which
compared to a current account
typically entails withdrawal
restrictions but yields a better
interest.
36. If your total for
savings is $0 or
less, it is time to
rethink what you
earn and spend.
DAY 5
