Budgeting:How much money do you really

have?

What is a budget?

• A spending plan– Simple—a college student, single family– Complex—a corporation

Advantages

• Establishes goals for money

• Live on money earned

• Eliminate wasteful spending habits

• Achieve long term goals

Planning a budget

• Estimate income

• Estimate expenses

Types of expenses:

• Fixed

• Variable

Fixed expenses

• Set amount due-– Taxes– Rent– Insurance– Utilities– Education

Variable expenses

• Vary in cost-– Food– Clothing– Gifts– Entertainment– Medical and dental

Sample BudgetRegular monthly payments

Rent/home payment $350Car payment $200Appliance pymt $65Health plan pymt $55Life Insurance $110Miscellaneous $50

Total $830

Sample Budget

• Household operating expenses:• Telephone $80

• Gas/Electricity $140

• Water $25

• Repairs, Upkeep $100

» Total $345

Sample Budget

• Food Expenses:At home $150

Away from home $50

TOTAL $200

Sample Budget

• Personal Expenses:– Clothing, Shoes $75– Cleaning, Laundry $25– Doctor/Dentist $75– Education $50– Auto Gas $150– Spending Money $100

» TOTAL $475

Sample Budget

• Total Living Expenses $1,850

• Net Monthly $2,100

• Extra Money $250

Hints• Stick it out!!!

• Keep it simple!!!

• Be realistic!!!

• Be flexible!!!

• Keep organized!!!