Planning a budget. Lifestyle – Pre-budgeting Lifestyle is a way of living that reflects that...

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 rank them 1-

103. 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

Estimate your Expenses Fixed—paid regularly

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

Food, clothing, gas for car

**DISPOSABLE INCOME - FIXED EXPENSES – - VARIABLE EXPENSES =DISCRETIONARY INCOME

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

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 TOTALS

Work

Allowances

Lunch Money

TOTAL INCOME

EXPENSES

Daily Lunches

Supplies

Snacks

Entertainment

SAVINGS

Deposits

TOTAL EXP & SAVINGS

Ways to Stick to a Budget

Shop with budget in mindPlan for large purchases so you

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

Minimum Wage $7.25/hour 40 hours a week, 52 weeks

Yearly income BEFORE taxes = $15,080

Taxes = 23% of income How much will you make each

month? Approximately $967

Other job $40,000/year before taxes Taxes = 23% of income

How much will you make each month? Approximately $2567