September 9- BUDGET UNIT: SEPTEMBER 9. How do you budget your expenses? If you do not budget,...
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Transcript of September 9- BUDGET UNIT: SEPTEMBER 9. How do you budget your expenses? If you do not budget,...
September 9-
CREATE YOUR OWN BUDGET PORTFOLIO
BUDGET UNIT: SEPTEMBER 9
How do you budget your expenses? If you do not budget,
explain why…..
BELLWORK: 9/9
http://www.youtube.com/watch?v=mZbV0zeFhyY
BILL COSBY- BUDGETING 101
You will soon be leaving home. You will be
going to college or simply starting your own
household. Either way – the real world and
the costs to live independently of your parents
is your next step.
STEPS: Setting up a budget to manage your finances is the first step Living by your budget is the second Planning for emergencies and the “what if factors” is the third
SUPPORTING YOURSELF
To set up a monthly budget, you need to determine how
much take-home pay you get on a regular basis. If you get
paid once per month, this one is easy - it's the amount of
your salary that you 'take home'. If not, you'll need to do
some math.
If you don't get paid by the month, use the following chart:For weekly pay, multiply by 4.333
For every two weeks' pay, multiply by 2.167
For twice-a-month pay, multiply by 2
For irregular monthly income, divide by 12
STEP 1: ADD UP YOUR INCOME
Your budget starts with creating spending
categories. How much you budget for various
items will depend on you.
Create budget categories, a detailed record of
your spending will help you determine how
much to budget in those categories.
Since saving is vital to long-term financial
security, money advisors suggest that savings
be budgeted as a fixed expense. Suggest you
start an IRA for you retirement right out of high
school.
Write down what you think you'll be
spending in the category areas.
STEP 2: ESTIMATE YOUR EXPENSES
Keeping records of your actual income and expenses is
critical in the budget process .
This information helps you to understand any "budget
variances" - the difference between the amount you
budgeted and what you actually spent for the month, or
time period.
STEP 3: FIGURE OUT THE DIFFERENCE
Have changes in your personal or financial situation created a
need to change certain goals?
Have new goals with a high priority surfaced?
Addressing these issues while creating an effective saving
method will help ensure that you meet your financial goals.
Finally, when creating and implementing a spending plan,
remember that an effective budget should be
WELL-PLANNED... REALISTIC... FLEXIBLE... and CLEARLY
COMMUNICATED to all household members.
Note! If your budget is realistic and if you use it to guide your
expenses, you'll be better prepared for your emergencies - other
unexpected costs. You'll also be better prepared for a financially
secure future.
As you track your monthly expenses, you may need to trim
expenses. Some expenses are more easily trimmed. For
example, you need to make rent payments and buy groceries,
but you may be able to go without seeing that new movie.
Cutting back is usually a better place to start than cutting out;
however, it may be a signal that you need to revise your budget
and financial goals.
What should you cut first when a budget shortage occurs?
This question doesn't have easy answers, and the answers
will vary for different household situations.
The most common overspending areas are entertainment and
food, especially away-from-home meals. Purchasing less
expensive brands, buying quality used products.
STEP 4: TRACK, TRIM, AND TARGET
http://www.econedlink.org/interactives/index.php?iid=232
BUDGETING 101
For the Next week, we will be looking at Paychecks, what to do with them and how to use them. This information will be
relevant and useful towards your future aspirations and goals.
INVESTING IN MY FUTURE