Section 2: What are the components of a quality budget?Unit 3:
BudgetingI Can: Identify the 3 types of expenses: fixed, variable
and periodicExplain what is meant by pay yourself firstDescribe
purchasing power
Pay yourself firstThis is the CARDINAL RULE of finance.It means
that you should automatically put money into a savings account for
yourself. The general rule is 10% of your pay goes to youFixed,
variable, periodic expensesFixed expenses: are expenses that do not
changeHouse payment, car payment, utilities bills, etcVariable
expenses: are expenses that you regularly have, but the amount
changesgroceries, entertainment, clothingPeriodic expenses: appear
irregularly and vary in costCar repair, health care, etcPurchasing
PowerThis is your ability to buy goods and servicesIf you have a
balanced budget and set goals that work within your standard of
living, you should have great power to purchase what you wantThe
wealthier your are, the greater your purchasing power.Bill Gates
has greater purchasing power than Jen Klingeman or Doc CarranzaCan
I? Identify the 3 types of expenses: fixed, variable and
periodicExplain what is meant by pay yourself firstDescribe
purchasing power
I can prove this by completing: Fixed, variable or periodic
Worksheet
