budgeting matters

Budgeting MattersBudgeting Matters

Why Budget?Why Budget?

• See where your money comes from

• See where your money is going

• Plan for long term goals

• Save for unexpected emergencies

• Have more spending money!

Needs versus WantsNeeds versus Wants

• How do you feel about money?

• Are you spending more than you have?

• Is what you’re buying a need or a want?

“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”

-Benjamin Franklin

How much do Americans save?How much do Americans save?

How much do YOU save?How much do YOU save?

What’s an emergency fund?What’s an emergency fund?

•Money saved for unexpected emergencies

•Ideally, the amount should be 6-12 months of expenses

Budgeting ExpensesBudgeting Expenses

• What expenses are included in a monthly budget?

“I have enough money to last me the rest of my life. . .unless I buy something.”

– Jackie Mason, comedian

TRUE TRUE OROR FALSE? FALSE?

Only 14 out of 50 states in the U.S. require students to take a financial course to graduate.

TRUETRUE

Most high schools offer personal finance as an elective course.

How much do you cost???How much do you cost???

• It costs $270,000 to It costs $270,000 to raise a child in the raise a child in the United States to age 17.United States to age 17.


54% of American homes are paid for.

FALSE-only 2%

What are your short term and What are your short term and long term goals?long term goals?

SHORT-TERM GOALS

Buy a cell phone

Save for vacation

Buy new clothing

iPod

LONG-TERM GOALS

Purchase a car

Save $10 each week

Pay for college

What Can You Do NOW?What Can You Do NOW?

Be a smart spender

• Shop around for the best deals• Don’t buy on impulse• Use coupons or wait for sales• Use the good student discount• Substitute – choose off brands• Negotiate on large items• Talk to others who have experience

Debit vs. Credit CardsDebit vs. Credit Cards

What’s the difference?

• Debit cards deduct money from your bank account

• Credit cards loan you money which you have to pay back. After 30 days, interest accrues.


It is always bad to use credit cards.

FALSE

Credit CardsCredit Cards

• How do I choose a credit card?How do I choose a credit card?– Low interest rate

– No annual fee

– No start up fee

– Incentive programs• www.bankrate.org helps you choose a card that www.bankrate.org helps you choose a card that

is right for youis right for you..

Credit CardsCredit Cards

• How can you use credit cards wisely?How can you use credit cards wisely?– Pay entire amount off each month

• This builds your credit score

– Use for emergencies• Car repairs• Ambulance ride or hospital stay

Let’s reviewLet’s review

• WHAT to spend?– Budgeting allows you to decide how much

money can be spent on what items.

• WHY to spend?– Determining needs versus wants helps decide

why you are buying an item.

• HOW to spend?– Deciding if you can pay for an item now or if

you need to put it on credit.

Helpful Web SitesHelpful Web Sites

• www.fool.com/teens discussion boards and detailed information

• www.moneyopolis.org interactive game simulations

• www.creditunionsrock.org wide range of content

• www.themint.org mock situations of budgeting, saving, investing, etc.

Thank You!Thank You!

Curriculum Development Committee:John Comer, Comer ConsultingD.J. Enga, Auriton SolutionsShawn Jacobson, Legacy Financial AdvisorsBob Kaitz, BestPrepRachael Kelly, Asti Consulting GroupAngela Laubmeier, BestPrepJennifer Ruhland, Family MeansJanet Stanzak, Financial EmpowermentBonnie Vagasky, BestPrepSuzy Wheeler, Family Means ©2007 BestPrep

BestPrep gratefully acknowledges the Foundation for Financial Planning for providing financial support to fund this project. We also are indebted to the Financial Planning Association of Minnesota for their help in creating and piloting this presentation.

budgeting matters

Economy & Finance