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# Budgeting

Budgeting. Creating a Plan for Your Spending. \$50.00. What would you do if someone gave you \$50? Would you spend it on something, would you save it? What would you do?. Vocabulary. Budget : a plan for managing your money during a given period of time

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## Budgeting

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### Presentation Transcript

1. Budgeting Creating a Plan for Your Spending

2. \$50.00 What would you do if someone gave you \$50? Would you spend it on something, would you save it? What would you do?

3. Vocabulary • Budget: a plan for managing your money during a given period of time • Expense: things you pay for each month with your income • Fixed Expense: expenses that are the same each month (same amount, pay every month) • Variable Expense: expenses that are not the same each month, they fluctuate

4. What Type of Expense Is It? ***Periodic Expense: expenses that you don’t pay for each month, pay on as needed basis***

5. P.Y.F. • Pay Yourself First!

6. Do the Math! • The Simpson family wants to buy a new refrigerator for the kitchen. Mr. Simpson has visited several stores and estimates that it will cost around \$700 to buy and install the type of refrigerator the family wants. If their goal is to buy it in six months, how much do they need to save a month?

7. Do the Math! • The Mencias want to buy their oldest daughter a computer to take to college next year. They’ve shopped around and think they can get a good desktop computer with all the software and a printer for about \$1,100. With 15 months to save, how much do they need to set aside a month?

8. Steps to Create a Budget • Decide time frame for tracking income/expenses • Jackson’s Monthly Budget • Identify your total income Jackson’s Estimated Income: Paycheck (after taxes) \$2,100 Interest Earned: \$50 Total Income: \$2,150

9. Steps to Create a Budget • Identify all your expenses (fixed or variable) Jackson’s Fixed Expenses Savings (PYF) \$500 Car Payment \$325 Rent \$750 Cable TV/Internet \$75 Jackson’s Variable Expenses Utilities \$150 Food \$200 Gas \$100 Jackson’s Periodic Expenses Car Insurance (\$300/6mo) \$50

10. Steps to Create a Budget • Do the math (subtract total expenses from income) Jackson’sTotal Expenses \$2,150 Total Income \$2,150 -Total Expenses \$2,150 \$0 • Evaluate your budget

11. Build a Budget Jessica is a Senior in high school. She earns \$8 an hour working approximately 25 hours a week at the local grocery store. About 30% of her pay is deducted for taxes. Jessica also earns approximately \$15 each month in interest on savings. What is Jessica’s monthly income?

12. Build a Budget Jessica’s Monthly Expenses Savings: 10% of her income Car payment: \$235 Cell Phone: \$35-\$45 Gas: \$40-\$60 Auto Insurance: \$50 Frequently buys games and music \$25-\$45 Typically buys her own clothes \$30-\$50 List Jessica’s monthly expenses, identify if each expense if fixed or variable, estimate cost of variable expenses

13. Build a Budget • One of Jessica’s short term goals is to take a trip to visit her grandparents right after graduation (in June). She expects this to cost \$1,000 and she has already saved \$500. Add this expense under her savings category (which already has 10% of her income listed) It is October, Jessica has 8 months to save \$500

14. Build a Budget • Add the fixed expenses together • Total Fixed Expenses: • Add the variable expenses together • Total Variable Expenses: • Add the Fixed and Variable expenses together • Total Expenses: • Subtract Expenses from Total Income • Are we within our limit?

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