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Budgeting: Using Your Money Wisely. Megan Hunley. What You Will Learn. Be Able to: Identify Sources of Income Identify Types of Expenses Understand the Importance of Saving Construct a Budget. Using the PowerPoint.
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Budgeting: Using Your Money Wisely Megan Hunley
What You Will Learn • Be Able to: • Identify Sources of Income • Identify Types of Expenses • Understand the Importance of Saving • Construct a Budget
Using the PowerPoint • To answer the questions during the quiz, just click on the answer. It will then tell you if you got the answer right. • You will see these buttons throughout the presentation. They will help you navigate through the lesson. • When you take the quiz and get a question wrong you have the option to get a hint which takes you to the slide where you learned the information. The slide will then have a link that says “question” that will take you back to the quiz question you were on. Home Page Previous Next Slide Slide
HomePick which part of the presentation you would like to go to, or use the “Next Slide” arrow to start from the beginning. Income Expenses Savings Budget
Income • Cash Flow: Refers to the money you have coming in as well as the money you have going out. • Income: Any money you receive • Examples of Income: Money earned from a job, allowance, birthday money, money from selling your things, or the interest earned on a savings account Question 1 Question 2 Skip to Quiz
Income cont. • If you already work, you may have been surprised when you received your first paycheck because it was less than you expected! This is because of deductions. • Why do you need to know about income and all the different types of income especially when it comes to a paycheck? So you will know how much money you have to get the things you need and want. Also, so you will not end up like Rachel in the clip.
Gross Income Gross Income or Earnings: Total amount of income from your wages before deductions. Ex: If you worked 10 hoursandwere paid $10 an hour your gross income would be $100 10x10=100 Question 3
Deductions Deductions: When an employer subtracts money for a number of items before writing you the check. For most people, taxes are the biggest deductions. Taxes are fees that support government programs and are required by law to be applied to income, property, or goods. Question 4
Examples of Deductions Example of Tax Deductions
Examples of Deductions Other Deductions: When your older you may request to have money from your paycheck go directly towards savings or insurance.
Net Income Net Income/Net Pay: “Take-home pay.” Income after deductions. Question 5
Quiz • What is cash flow? A. Any money you receive B. Total amount of income from your wages before deductions C. Refers to the money you have coming in as well as the money you have going out. D.“Take-home pay.”
Quiz 2. What is income? A. When an employer subtracts money for a number of items before writing you the check. B. Refers to the money you have coming in as well as the money you have going out. C. Total amount of income from your wages before deductions D. Any money you receive
Quiz 3. What is gross income? A. Total amount of income from your wages before deductions B. When an employer subtracts money for a number of items before writing you the check. C. “Take-home pay.” D. Any money you receive
Quiz 4. What are deductions? A. Any money you receive B. When an employer subtracts money for a number of items before writing you the check. C. Refers to the money you have coming in as well as the money you have going out. D. “Take-home pay.”
Quiz 5. What is net income? A. Any money you receive B. Total amount of income from your wages before deductions C.“Take-home pay.” D. When an employer subtracts money for a number of items before writing you the check.
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Expenses • Why do you need to learn about expenses? • So youknow how to budget for changing expenses. • To start thinking about what expenses are important so you do not end up like Kevin. He used money on expenses he did not need and could not pay off. Skip to Activities
Fixed Expense • Cost the same amount every time. You typically know what you need to pay each month. • Examples: Mortgage Car Payment Skip to Activities
Variable Expense • Changes in amount, so you will usually have control over how much they will be. • Examples: Gas Groceries
Occasional Expense • Ones you do not pay every month and can be either fixed or variable • Examples: Car Repairs Car Insurance Skip to Activities
Unnecessary Expense • Something you do not need. • Something you want less than another item • Examples of Unnecessary Expenses: Take-Out Going to a Coffee Shop Going to the Movies Music
Make a list of all the things you bought this past week on a sheet of paper then fill out this table. Write each of your expenses underneath the correct title. If one of your expenses is fixed then write it under fixed. If it is also unnecessary then write it there as well. Have a teacher check your work when you are done.
Savings • Why do you need to save? • You need to save in order to get the items and experiences that are the most important to you. • You really want a car, so instead of spending money everyday on buying a latte from Starbucks, you should put the money aside for buying a car. • You also need savings for occasional needed expenses like car repairs after you buy your car. • You do not want to end up like Rebecca. She would have been able to purchase her scarf if she had savings. Skip to Activities
Pay Yourself First (P.Y.F) • Set aside a certain amount of money from your paycheck into an account to meet a short-term or long-term financial goal. • Save your money to be able to purchase something you really need or want later. Skip to Activities
This is how you figure out how much to save each month to meet a financial goal. 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 each month? Skip to Activities
This is how you figure out how much to save each month to meet a financial goal. 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 each month? The equation: Cost of the item/when you want to buy the item=how much you should save each month Skip to Activities
This is how you figure out how much to save each month to meet a financial goal. 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 each month? $700-cost of item 6 months-when they want to buy the item Skip to Activities
This is how you figure out how much to save each month to meet a financial goal. 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 each month? 700/6= 116.67 Skip to Activities
Now it’s your turn. Type the answer into the white box and have a teacher check it before you move forward. 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 each month? $1,100 ÷ 15 =
Budget • A plan for managing your money during a given period of time. Skip to Activities
Now the fun part…Making a Budget! • Why make a budget? • You need to make a budget to make sure you pay what you need to pay and spend money on things you really want. Skip to Activities
Step 1 • First, decide the time frame for tracking your income and expenses. Skip to Activities
Step 2 • List all the money you have coming in. It’s helpful to break it down into categories—such as work, allowance, and “other” for gifts of money, or money you make from selling your stuff. Then total all your income. Skip to Activities
Step 3 • You need to make categories for each of your expenses. Don’t forget to include P.Y.F.! If you divide your expense categories into fixed and variable, it’ll be easier to see which ones you can adjust, if necessary. Remember, you should have a category for everything you regularly spend money on. Then total your expenses. Skip to Activities
Step 4 Subtract your total expenses from your total income. If the number is negative, you need to go back and adjust some of your variable expenses until the number is a zero. If it’s a positive number, you may want to think about adding some to your P.Y.F. line so you can reach your goals a little faster! Skip to Activities
Build Your Own BudgetTake your own income and expenses and make a monthly budget. Make sure your total expenses do not exceed your total income. Use the table to make your budget and remember to have a teacher check it when you are done.
