Make a list of all the reasons you can think of that would require you to live on less money

Hard Times Budget

Living on a fixed income

You were able to dream about your future, ideal lifestyle, which is extremely important to do.

In the real world, however, budgets don’t determine income. It’s the opposite.

*Income determines budget*

Hard Times Budget

Make a list of all the reasons you can think of that would require you to live on less money

• Taking a pay cut

•Getting laid off or fired

•Living on unemployment

•Injury/illness/death

•Taxes increase

•Divorce

•Relocating

•Having a baby

Some Samples Budgets

High School Dropout

$18,734 annual salary

How much is this a month?

$1,561 This figure is slightly higher than earning minimum

wage

Plan a monthly budget living on this income. All money must be used (no “extra” money) You cannot exceed $1,561 Figures must be reasonable & make sense for each

category

How would you allocate your money?Monthly budget for a family of four

1. Housing $_____2. Transportation $_____3. Clothing $_____4. Food $_____5. Sundries $_____6. Entertainment $_____7. Vacations $_____8. Child care $_____9. Health care $_____10. Furnishings $_____11. Savings $_____12. Miscellaneous $_____

Total $1,561

*Strategy

Hard Times BudgetHard times have hit the company you work for. To balance the budget, your company has to lay off workers. Unfortunately, you are fairly new to the job and have the lowest seniority, so you have been laid off. You are able to collect unemployment benefits each week, which is $450 (the maximum). You must now sit down with your budget and decide where you will cut expenses.

1. First, decide how much money you will earn a month collecting unemployment. $___________

2. Now, enter that amount on the “total” line in column B. Use your budgeting worksheets as references for costs. Costs must be REALISTIC!

3. Think about where you could cut expenses to meet this new lower monthly budget amount and enter those changes in each category in column B. Use your budgeting worksheets as references for costs. Costs must be REALISTIC!

4. Then, describe how you decided which expenses could be reduced. Star * the line items where it was easy to make cuts.

Necessities that MUST be included: housing, transportation, clothing, food, health care and child care

Expenses that are not a necessity, and considered a “wish” more than a need: entertainment, vacations, furnishings, savings, and miscellaneous. Could these be eliminated???

Average Monthly Expenditures

One person Two persons Three persons Four persons Five or more persons

Expenses

Housing

(w/o utilities)

718 1115 1265 1469 1471

Transportation 324 675 833 890 875

Clothing 76 130 187 198 262

Food 242 443 530 620 691

Health care 126 250 208 206 195

Source: U.S. Bureau of Labor Statistics, “Consumer Expenditure in 2002,” Feb. 2004

Hard Times Budget

Column A

Copy from your Budget Profile

1. Housing $_____

2. Transportation $_____

3. Clothing $_____

4. Food $_____

5. Sundries $_____

6. Entertainment $_____

7. Vacations $_____

8. Child care $_____

9. Health care $_____

10. Furnishings $_____

11. Savings $_____

12. Miscellaneous $_____Total $______

Column B

Collecting Unemployment

1. Housing $_____

2. Transportation $_____

3. Clothing $_____

4. Food $_____

5. Sundries $_____

6. Entertainment $_____

7. Vacations $_____

8. Child care $_____

9. Health care $_____

10. Furnishings $_____

11. Savings $_____

12. Miscellaneous $_____Total $______

Hard Times Budget1. Housing is the largest expense in a monthly budget. What

are some realistic options for cutting costs here?

2. Explain how you determined your housing costs.

3. List the categories that were the easiest to cut. Explain why.

4. List the categories that were the most difficult to cut. Explain why.

5. How did you feel as you were reallocating your funds from your ideal lifestyle budget?

6. Some life events that would cause you to live on less money are unpredictable and outside of your control. Others are not. Of the list of events you brainstormed, which ones can you prevent from happening to you?

Learn More. You'll Earn More!

Higher education is worth the effort.

Want to make money?                    What's the best way to improve your future earnings? Many people believe the answer lies in

getting a college education.Others point to the exceptional cases of wealthy businesspeople who dropped out of college as

strong counter-examples. But the thing about exceptional cases is that they're just that: exceptions.

On average, people who go to college earn more than those who don't. According to the Bureau of Labor Statistics, the median yearly income for someone with a

bachelor's degree is $53,300, while for those with only a high school diploma the amount is $32,552. That's a difference of $20,748! In fact, the greater level of education people complete, the more likely they are to earn more money. Each level of educational achievement provides a boost in earning power — from no high school diploma all the way through a professional degree such as a master's of business administration (M.B.A.), medical doctor (M.D.), or juris doctor (J.D.). The median income for this last group — those with professional degrees — is $79,508!

The difference in the salary earned by higher-educated workers compounds over a lifetime. The estimated earnings during the worklife (approximately 40 years) of a full-time worker who didn't complete high school are about $1 million dollars. Completing high school increases earnings by about a third of a million dollars, and completing a bachelor's degree raises worklife earnings to over $2.2 million.

Finally, people with less education often have fewer choices in life and are more likely to depend on government services than the rest of the population: 14.6 percent of high school dropouts were unemployed in 2009 — versus 5.2 percent of college graduates.

Source: Bureau of Labor Statistics, Current Population Survey 2009