Budgeting Lets Create a Budget for Jays Jean Junket Business

1
Budgeting Lets Create a Budget for Jays Jean
Junket Business!

• Why and how to create a budget

2
Why a budget is necessary

• Keys to success
• Forces one to realize how much they make and how
  they spend that money
  
• Plan to succeed dont fail to plan

3
Whats in a Budget?

• Income
• Money that is made or brought into your operating
  system. This could be your personal finances or a
  business.

• Expenses
• Money that is spent. Any thing that you have to
  buy planned or unexpected are considered
  expenses.

4
Income

• Planned Income
• Regularly get it (monthly/bi-weekly)
• A job
• An allowance
• Social Security Check
• Welfare
• Unplanned Income
• A surprise/unexpected
• Lottery
• Birthday/Gifts
• Tax return

5
Expenses

• Planned Expenses
• Have every month
• Rent
• Car payments
• Insurance
• Food
• Unplanned expenses
• Are not expecting
• Car repairs
• Medical injuries
• Home repairs

6
Creating a Budget

• On Left Income
• Make a list of all ones income that is regular
  income. It must be income that you will get every
  month.

• On Right-Expenses
• Make a list of all the items that you have to pay
  for every month. Some have exact amounts (rent)
  and some can only be estimates (fuel) Estimate as
  close as possible

7
Create a Budget!

• Income
• School wages -
• 1200
• Savings interest -
• 50
• Delivering papers -
• 100
• Total Income
• 1350

• Expenses
• Rent - 400
• Insurance - 200
• Car payment - 250
• Food - 300
• Fuel - 100
• Savings - 50
• Miscellaneous 50
• Total Expenses 1350

8
Tips for Creating a Budget

• The budget must balance!
• The income must equal the expenses. If you make,
  you must have a destination for that money!
  
• That does NOT mean you MUST SPEND it. Planning to
  put money in some type of savings account is a
  GREAT idea.
  
• The Income MUST EQUAL Expenses!!

9
Jays Jean Junket

• Welcome to Jays Jean Junket!
• Jay is a custom designer who makes blue jean
  jackets. He/She has three designs that are
  shipped to seven different stores every month.
  Jay has asked us to help set up a budget so Jay
  can save money to expand the size of the building.

10
Jays Income

• Butterfly Jacket 45
• Straight line Jacket 40
• Denim and Lace Jacket 50
• Each of the seven stores have standing monthly
  orders for all three jackets. They all receive 20
  jackets of each style every month. This is Jays
  only source of income. What is Jays monthly
  income?

11
Jays Income

• If you said 18900, then you are correct! This
  is Jays monthly fixed income . . . the amount of
  money Jay expects to bring in every month.

12
Jays Expenses

• Building payment 2000 (only 12 pmts left)
• Utilities 1200 (This is an average of last
  years monthly payments)
  
• Wages 4600 (Two full time/ one part time
  helper)
  
• Insurance 1800
• Shipping 1000
• Supplies 4000
• Miscellaneous 500

13
Jays Expenses

• Add up Jays fixed or planned on expenses. What
  do you get?
  
• If you got 15100, then you are correct!
• How should Jay balance the budget in order to
  someday expand the building?

14
Jays Budget

• Why will Jay have to create a new budget this
  time next year?
  
• Because the building will be paid for.