September 9-

CREATE YOUR OWN BUDGET PORTFOLIO

BUDGET UNIT: SEPTEMBER 9

How do you budget your expenses? If you do not budget,

explain why…..

BELLWORK: 9/9

http://www.youtube.com/watch?v=mZbV0zeFhyY

BILL COSBY- BUDGETING 101

You will soon be leaving home. You will be

going to college or simply starting your own

household. Either way – the real world and

the costs to live independently of your parents

is your next step.

STEPS: Setting up a budget to manage your finances is the first step Living by your budget is the second Planning for emergencies and the “what if factors” is the third

SUPPORTING YOURSELF

To set up a monthly budget, you need to determine how

much take-home pay you get on a regular basis. If you get

paid once per month, this one is easy - it's the amount of

your salary that you 'take home'. If not, you'll need to do

some math.

If you don't get paid by the month, use the following chart:For weekly pay, multiply by 4.333

For every two weeks' pay, multiply by 2.167

For twice-a-month pay, multiply by 2

For irregular monthly income, divide by 12

STEP 1: ADD UP YOUR INCOME

Your budget starts with creating spending

categories. How much you budget for various

items will depend on you.

Create budget categories, a detailed record of

your spending will help you determine how

much to budget in those categories.

Since saving is vital to long-term financial

security, money advisors suggest that savings

be budgeted as a fixed expense. Suggest you

start an IRA for you retirement right out of high

school.

Write down what you think you'll be

spending in the category areas.

STEP 2: ESTIMATE YOUR EXPENSES

Keeping records of your actual income and expenses is

critical in the budget process .

This information helps you to understand any "budget

variances" - the difference between the amount you

budgeted and what you actually spent for the month, or

time period.

STEP 3: FIGURE OUT THE DIFFERENCE

Have changes in your personal or financial situation created a

need to change certain goals?

Have new goals with a high priority surfaced?

Addressing these issues while creating an effective saving

method will help ensure that you meet your financial goals.

Finally, when creating and implementing a spending plan,

remember that an effective budget should be

WELL-PLANNED... REALISTIC... FLEXIBLE... and CLEARLY

COMMUNICATED to all household members.

Note! If your budget is realistic and if you use it to guide your

expenses, you'll be better prepared for your emergencies - other

unexpected costs. You'll also be better prepared for a financially

secure future.

As you track your monthly expenses, you may need to trim

expenses. Some expenses are more easily trimmed. For

example, you need to make rent payments and buy groceries,

but you may be able to go without seeing that new movie.

Cutting back is usually a better place to start than cutting out;

however, it may be a signal that you need to revise your budget

and financial goals.

What should you cut first when a budget shortage occurs?

This question doesn't have easy answers, and the answers

will vary for different household situations.

The most common overspending areas are entertainment and

food, especially away-from-home meals. Purchasing less

expensive brands, buying quality used products.

STEP 4: TRACK, TRIM, AND TARGET

http://www.econedlink.org/interactives/index.php?iid=232

BUDGETING 101

For the Next week, we will be looking at Paychecks, what to do with them and how to use them. This information will be

relevant and useful towards your future aspirations and goals.

INVESTING IN MY FUTURE