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Creating a Budget for Jay's Jean Junket Business

Learn why and how to create a budget for a business like Jay's Jean Junket. Discover the keys to budgeting success and how it can help you realize your income and expenses. Plan for success with a carefully crafted budget.

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Creating a Budget for Jay's Jean Junket Business

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Presentation Transcript

  1. Budgeting Let’s Create a Budget for Jay’s Jean Junket Business! • Why and how to create a budget

  2. Why a budget is necessary • Keys to success • Forces one to realize how much they make and how they spend that money • Plan to succeed – don’t fail to plan

  3. Income Money that is made or brought into your operating system. This could be your personal finances or a business. Expenses Money that is spent. Any thing that you have to buy – planned or unexpected are considered expenses. What’s in a Budget?

  4. Income • Planned Income • Regularly get it (monthly/bi-weekly) • A job • An allowance • Social Security Check • Welfare • Unplanned Income • A surprise/unexpected • Lottery • Birthday/Gifts • Tax return

  5. Expenses • Planned Expenses • Have every month • Rent • Car payments • Insurance • Food • Unplanned expenses • Are not expecting • Car repairs • Medical injuries • Home repairs

  6. On Left – Income Make a list of all ones income that is regular income. It must be income that you will get every month. On Right-Expenses Make a list of all the items that you have to pay for every month. Some have exact amounts (rent) and some can only be estimates (fuel) Estimate as close as possible Creating a Budget

  7. Income School wages - $1200 Savings interest - $50 Delivering papers - $100 Total Income $1350 Expenses Rent - $400 Insurance - $200 Car payment - $250 Food - $300 Fuel - $100 Savings - $ 50 Miscellaneous $ 50 Total Expenses $1350 Create a Budget!

  8. Tips for Creating a Budget • The budget must balance! • The income must equal the expenses. If you make, you must have a ‘destination ‘for that money! • That does NOT mean you MUST SPEND it. Planning to put money in some type of savings account is a GREAT idea. • The Income MUST EQUAL Expenses!!

  9. Jay’s Jean Junket • Welcome to Jay’s Jean Junket! Jay is a custom designer who makes blue jean jackets. He/She has three designs that are shipped to seven different stores every month. Jay has asked us to help set up a budget so Jay can save money to expand the size of the building.

  10. Jay’s Income • Butterfly Jacket $45 • Straight line Jacket $40 • Denim and Lace Jacket $50 • Each of the seven stores have standing monthly orders for all three jackets. They all receive 20 jackets of each style every month. This is Jay’s only source of income. What is Jay’s monthly income?

  11. Jay’s Income • If you said “$18900,” then you are correct! This is Jay’s monthly fixed income . . . the amount of money Jay expects to bring in every month.

  12. Jay’s Expenses • Building payment $2000 (only 12 pmts left) • Utilities $1200 (This is an average of last year’s monthly payments) • Wages $4600 (Two full time/ one part time helper) • Insurance $1800 • Shipping $1000 • Supplies $4000 • Miscellaneous $500

  13. Jay’s Expenses • Add up Jay’s fixed or planned on expenses. What do you get? • If you got “$15100,” then you are correct! • How should Jay balance the budget in order to someday expand the building?

  14. Jay’s Budget • Why will Jay have to create a new budget this time next year? • Because the building will be paid for.

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