pp. 445-467

Managing Spending

What to do with the money you earn?

Budgeting Your MoneyBudget:Budget helps you:

Developing a Budget

FIVE STEPS:

1. Establish financial goals2. Estimate your monthly income and

expenses3. Balance your budget4. Keep track of income and expenses5. Evaluate the budget

Step 1: Establish Financial GoalsDecide what you need and want.Start with short term goals and then long term

goals.Short term goal:

Long term goal: Emergency cash fund:

Step 2: Estimate Your Monthly Income and Expenses

Income:Expenses: List all potential expensesFixed expenses:

Flexible expenses:Food, clothing, utilities, home furnishings and

equipment, transportation, health care, recreation and education

Step 3:Balance Your Budget

Subtract the expenses you expect to have from the income you expect to get.

If expenses exceed income:

Budget

Take Home pay $ 1,800.00

Expenses

Rent $ 1,000.00

Groceries $ 200.00

Utilities $ 150.00

Clothing $ 80.00

Gas $ 120.00

Misc. $ 100.00

Total: $ 1,650.00

Difference: $ 150.00

Step 4: Keep Track of Income and Expenses

Keep a record of all income you receiveKeeping track of expenses is the most

important!

Step 5: Evaluate the Budget

This step helps you see if your budget is working for you.

Questions to ask yourself:1. Do you have enough income to cover your

expenses?2. Is the budget flexible enough to handle

unexpected expenses and emergencies?3. Is your money doing what you want it to do?

QUICK REVIEWFIXED vs. Flexible Expenses

Products/Services

FIXED FLEXIBLE

Pet care

Car Repair

Doctor bill

Groceries

Movie

Rent

Car Payment

Bowling

Phone bill

REALITY CHECK1. Click on link below

http://www.lmci.state.tx.us/realitycheck/flash.html

2. Complete the Reality Check Worksheet Turn in to basket when completed.