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Budgets and Financial Records

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Estimate total expected income for time period. All $$ you expect to earn ... Clothing. Fixed Expenses ... The difference between your assets and liabilities ... – PowerPoint PPT presentation

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Title: Budgets and Financial Records


1
Budgets and Financial Records
  • Chapter 8

2
  • Interpret
  • Keeping a Budget is not like having a
    straightjacket

3
  • Who has Budget
  • Who keeps a Record of what they spend, own, their
    income and expenses
  • Records
  • Applying for Credit
  • Make financial decisions
  • Try to determine your Net Worth
  • Organized financial file is key to financial
    health

4
Financial Planning
  • Disposable Income
  • The money you have left to spend or save after
    taxes have been paid
  • Financial Plan
  • A set of goals for spending, saving and investing
    the money you earn

5
Preparing a Budget
  • Estimate total expected income for time period
  • All you expect to earn

6
Preparing a Budget
  • Decide how much you want to save
  • Suggestions 10 of disposable income
  • Future needs and wants
  • Expected and Unexpected

7
Prepare a Budget
  • Estimate Expenses (Needs vs. Wants)
  • Money you need for day-to-day purchases
  • Lunches
  • Fees
  • Personal Care
  • Clothing

8
Expenses
  • Fixed Expenses
  • Costs you are obligated to pay at specific times,
    regardless of other events
  • You cannot change these without making a major
    revision in your lifestyle

9
Expenses
  • Variable Expenses
  • Costs that vary in amount and type, depending on
    events and the choices you make
  • i.e. your grocery bill can be larger or smaller
    depending on what you choose to buy

10
Prepare a Budget
  • Balance Your Budget
  • AVOID SPENDING MORE THAN YOU MAKE
  • Read article from the simple dollar
  • Show monthly budget of Mike and Jennifer in book
    page 177
  • Workbook budget page 72-76

11
Personal Record
  • W-2
  • Bank Statements
  • Statements from investment companies
  • Receipts of charitable contributions
  • Bills
  • Work Related expenses

12
Net Worth Statement
  • Assets-
  • Items of value that a person owns
  • Liabilities (debts)-
  • Amounts of money owed to others
  • Net worth-
  • The difference between your assets and
    liabilities
  • Show page 179

13
Personal Property Inventory
  • A list of all valuable items you own
  • Purchase price
  • Current Values
  • Show page 179
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