Budgeting : Making the Most of Your Money

NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money

Budgeting: MakingBudgeting: Makingthe Most of Your Moneythe Most of Your Money


Today we will Covers…• Examine spending habits• Benefits of having a spending plan, or budget• Identify various sources of income• Identify types of expenses• Importance of saving (paying yourself first)• Constructing a budget• Record keeping involved with budgeting• How a budget will change throughout your life


2-A-12-A-1For an interactive version of this slide, open For an interactive version of this slide, open

the Excel File for this unit and go to Excel the Excel File for this unit and go to Excel Worksheet 2-A-1 Worksheet 2-A-1


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For an interactive version of this slide, For an interactive version of this slide, open the Excel File for this unit and go open the Excel File for this unit and go to Excel Worksheet 2-A-2 to Excel Worksheet 2-A-2


2-A-22-A-2


Reasons for a Spending Plan Reasons for a Spending Plan ……Helps you determine where you are Helps you determine where you are

spending your money currently.spending your money currently.

……Helps you decide where to spend your Helps you decide where to spend your money in the future. money in the future.

……You have an organized way to save for You have an organized way to save for things that cost more. things that cost more.

……Puts you in control of your financial Puts you in control of your financial future, beginning NOW.future, beginning NOW.

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Three SlidesThree Slides


People Without a Budget… People Without a Budget…

……Are less likely to know what they have.Are less likely to know what they have.……Have no plan, often coming up short Have no plan, often coming up short

before their next paycheck or allowance.before their next paycheck or allowance.……Are almost certain to have no plan to Are almost certain to have no plan to

save for more expensive spending goals.save for more expensive spending goals.

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QuestionsQuestionsDoes it makes sense to create and live Does it makes sense to create and live

within a budget when you don’t have a within a budget when you don’t have a lot of money?lot of money?

What if you find that you are What if you find that you are consistently spending more in one area consistently spending more in one area than you had planned to?than you had planned to?

What if you find that you can’t live What if you find that you can’t live within your budget?within your budget?

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2-C2-CFor an interactive version of this slide, open the For an interactive version of this slide, open the

Excel File for this unit and go to the Excel Excel File for this unit and go to the Excel Worksheet with this same number Worksheet with this same number

FIXED, VARIABLE, OR PERIODIC?

Expense Fixed Variable Periodic

Loan Payment X

Electric Bill X

Twice-yearly Insurance Payment

X

???

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SSAAVVEE

etting aside money for “big ticket items”etting aside money for “big ticket items”

voids borrowing, which costs you a lot! It’s avoids borrowing, which costs you a lot! It’s a

ery wise thing to do, becauseery wise thing to do, because

very time you pay yourself first, you are very time you pay yourself first, you are developing adeveloping a saving habitsaving habit that leaves you that leaves you with more money to spend later on things that with more money to spend later on things that are really important to you!are really important to you!

PAY YOUR$ELF FIRST!PAY YOUR$ELF FIRST!

2-D-12-D-1.. (2-D-2 and 2-D-3 on Excel file Unit 2 (2-D-2 and 2-D-3 on Excel file Unit 2 Visuals.xls)Visuals.xls)


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For an interactive For an interactive version of this slide, version of this slide, open the Excel file for open the Excel file for this unit and go the this unit and go the Excel worksheet #2-EExcel worksheet #2-E


Personal Personal Plan for Plan for One WeekOne Week

$20.00Balance

$120.00Savings and Spending

$140.00Income

$120.00Total Savings & Spending

15.00Miscellaneous

33.00Transportation

16.50Gifts and Contributions

10.00Entertainment

14.50Clothing

11.00Food

$20.00Savings (PYF)

Savings and Spending

$140.00Total Income

15.00Allowance

$125.00Part-Time Job

Income (after taxes)

One Week

Personal Spending/Savings Plan

$20.00Balance

$120.00Savings and Spending

$140.00Income

$120.00Total Savings & Spending

15.00Miscellaneous

33.00Transportation

16.50Gifts and Contributions

10.00Entertainment

14.50Clothing

11.00Food

$20.00Savings (PYF)

Savings and Spending

$140.00Total Income

15.00Allowance

$125.00Part-Time Job

Income (after taxes)

One Week

Personal Spending/Savings Plan


How to Build a BudgetHow to Build a Budget

1.1. Decide on a time frame for tracking Decide on a time frame for tracking expenses (week, two weeks, month).expenses (week, two weeks, month).

2.2. List all money you have coming in List all money you have coming in (income).(income).

3.3. Make categories for all expenses.Make categories for all expenses.4.4. Subtract total expenses from income.Subtract total expenses from income.5.5. Study your budget and your financial Study your budget and your financial

plan to make sure it fits with your plans plan to make sure it fits with your plans and goals.and goals.

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An

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An

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2-G2-G$575Total Estimated Expenses:

$575Total Estimated Expenses:25Recreation

30Recreation25Food

40Food20Electronics

40Music/Electronics20Video Game/Music

40Clothing50Clothing

40Gas45Gas

35Cell Phone40Cell Phone

Estimated Variable Expenses:Estimated Variable Expenses:

50Insurance*50Insurance

200Car Payment*200Car Payment

100Savings (P.Y.F.)100Savings (P.Y.F.)

Fixed Expenses:Fixed Expenses:

$575Total Estimated Income:$575Total Estimated Income:

15Interest Earned*15Interest Earned

$560Paycheck (after taxes)*$560Paycheck (after taxes)

Estimated Income:Estimated Income:

Jessica's Monthly BudgetJessica's Monthly Budget

$575Total Estimated Expenses:


30Recreation25Food

40Food20Electronics



40Gas45Gas














30Recreation25Food

40Food20Electronics



40Gas45Gas














30Recreation25Food

40Food20Electronics



40Gas45Gas













Today we Covered…• Examine spending habits

• Benefits of having a spending plan, or budget

• Identify various sources of income

• Identify types of expenses

• Importance of saving (paying yourself first)

• Constructing a budget

• Record keeping involved with budgeting

• How a budget will change throughout your life

Budgeting : Making the Most of Your Money

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Transcript of Budgeting : Making the Most of Your Money