Due: Tracking Your Spending

Bell Ringer:1. What is an impulse purchase?

Planning a budget

Lifestyle – Pre-budgeting Lifestyle is a way of living that

reflects that person’s attitudes and values Where will you live? Rent or Own What do you prefer in clothing? Latest

styles, sales, or resale What are your tastes in food? Eat out,

microwave meals or made from scratch What transportation will you use? Own

car, public transportation or biking

What are your values?1. Savings2. Food 3. Clothes 4. Sports/Recreation5. Church/giving 6. Car 7. School expenses 8. Hobbies 9. Social Activities 10. Personal appearance

Importance of Budgeting A budget is a plan for using your

money in a way that meets your wants and needs

Helps to control spending and accomplish goals

Not designed to deprive but assist in reaching personal goals

What Makes a Good Personal Budget? Ability to cover basic expenses Cash for the unexpected Savings for the future

**Create a budget you can live with!!**

Steps in Planning a Budget 5 Steps to planning a budget

1. Set your goals2. Estimate your income3. Estimate your expenses4. Plan for savings5. Balance and adjust your budget

Set your Goals What do you want to accomplish in

the next month? What is important to you? Are your goals practical?

It is useless to set a goal to buy a computer in one year if your income per year is less than the computer costs.

Estimate your Income Gross Pay – the total amount of

money you earned for a specific time

Deductions – are certain amounts that are subtracted from your pay before you receive your paycheck

Net Pay = Gross pay minus deductions sometimes called take home pay

Things that can affect your income level Education Level Occupation Experience Health

Possible Paycheck Deductions Federal Income Tax State Income Tax Retirement Health Insurance Social Security Medicare

Estimate your Expenses Fixed—paid regularly

Rent, insurance, car payments Variable (Flexible)—amount varies

Food, clothing, gas for car Discretionary – Expenses that can

be cut out completely Donations, gifts, charity,

entertainment

Plan for Savings Help to protect against unexpected

expenses Helps with future wants Helps with expenses that are

higher than you budgeted for PYF (Pay Yourself First)—10% right

when you get your check Investing – earning money with

your savings

Balance and adjust budget Check to be sure that actual

expenses are actually meeting costs you budgeted for

Check weekly, monthly and yearly Either cut expenses or increase

income

Personal BudgetINCOME TOTALSWorkAllowancesLunch MoneyTOTAL INCOMEEXPENSESDaily LunchesSuppliesSnacksEntertainmentSAVINGSDepositsTOTAL EXP & SAVINGS

Ways to Stick to a BudgetShop with budget in mindPlan for large purchases so you

know you can afford themNegotiate when possibleAvoid impulse buyingWatch for salesTrack purchases

SUBCATEGORIES IN YOUR BUDGET

Housing Payment/Rent Utilities Insurance Property Taxes Repairs & Maintenance

Transportation Payment Insurance Fuel Cost Repairs & Maintenance

Food Food at Home Cost of Eating out

Cost of Children Clothing Healthcare Child Care Education Miscellaneous – sports, hobbies &

activities

Insurance Besides auto & house/renters Health Disability Life

Other Credit card debt Entertainment Personal Care Health Care (not covered by

insurance) Apparel & Services Contributions & Charity Education & Reading