BudgetingMoney Management

THE BASIC ECONOMIC PROBLEM:

Limited Resources

And

Unlimited Wants And Needs

FINANCIAL PLANNING STEPS:

Set Goals

Analyze InformationCreate A Plan

Implement The PlanMonitor and Modify

The Plan (Evaluate)

Set New Goals (Continue Process)

FINANCIAL PLANNING PROCESS DECISION-MAKING

PROCESS

Set Goals

Analyze Informatio

n

Create A Plan

Implement the Plan

Monitor and Modify

the Plan

Set New Goals

Identify the Goal

Gather Information

Analyze Outcomes

Examine Alternatives

AlternativeChoices

Make A Decision

Evaluate Results

Set New Goals

MY SMART GOALS Worksheet For Short-Term, Medium-Term and Long-Term. Complete Two Goals For Each Time Frame.1.Short-Term-achievable in 0-3 months.2.Intermediate or Medium-Term-achievable in 3-12 months.3.Long-Term-achievable from 1 year or greater.

Specific GoalAchievement

Date

Timeline (Short,

Intermediate,Or Long-Term)

Estimated Cost

Amount toSave Per

Week

Buy Christmas Presents

12/25/05 Short $200 $67 [200/3]

Beach Trip 07/04/06 Intermediate $500 $18 [500/28]

Down payment on car

08/05/07 Long $1000 $12 [1000/84]

Thompson's Paper

Company

Budget Varianc

e Report

For November, 20 ____

DESCRIPTION

Budgeted

Actual

Variance

Receipts:

Sales of Pulp

$148,350.00

$148,350.00

__________

Sales of Boxes

$69,200.00

$72,250.00

__________

Total Receipts

$217,550.00

__________

__________

Payments:

Wages

$110,000.00

$115,000.00

__________

Rent

$15,800.00

$15,800.00

__________

Gas and Electric

$3,250.00

$3,380.00

__________

paper Supplies

$45,700.00

$46,400.00

__________

Office Expenses

$4,850.00

$4,550.00

__________

Equipment Repairs

$2,500.00

$2,145.00

__________

Insurance

$5,760.00

$5,760.00

__________

Taxes

$23,750.00

$22,480.00

__________

Telephone

$1,490.00

$1,560.00

__________

Total Payments

$213,100.00

__________

__________

Balance

$4,450.00

__________

__________

Balance Sheet

Cash Flow Statement

is helpful in establishing budget categories

is helpful in setting goals when budgeting

Balance Sheet

Assets Liabilities

Checking account 500.00 Home mortgage 50,000.00

Savings account 2,000.00 Credit card balance 300.00

Home $90,000.00 Loan $2,000.00

Automobile 5,000.00

Furniture $6,000.00 Total Liabilities $52,300.00

Computer $1,500.00

Jewelry $1,000.00 Owner’s Equity

Total Assets minusTotal Liabilities

$53,700.00

Total Assets $106,000.00

Total LiabilitiesAnd Owner’s Equity $106,000.00

Personal Cash Flow Statement

Monthly Cash Inflows (Income)

Net Income (take home pay)

$1,500.00

Other Income (interest) $30.00

Total Income $1,530.00

Monthly Cash Outflows (Expenditures)

Savings $150.00

Rent$400.00

Food $350.00

Clothing $50.00

Electricity/Gas $90.00

Telephone $30.00

Car $250.00

Personal Expenses $20.00

Entertainment $50.00

Total Savings and Expenditures $1,390.00

Net Cash Flow $140.00

Budget

•a plan for saving and spending•helps achieve financial goals•helps avoid credit problems•must be evaluated from time to time•is essential for consumers, businesses and governments

occur regularlysame amount each time

differ each time

Monthly Budget

Get a NEFE High School Financial Planning Guide [yellow books near the phone].

Turn to Unit Three You are to read page 27 – 32. Don’t complete any of these

worksheets, we’ll do them together in class.

Get a NEFE High School Financial Planning Guide [yellow books near the phone].

Turn to Unit Three You are to read page 27 – 32. Don’t complete any of these

worksheets, we’ll do them together in class.