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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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the 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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
2-A-22-A-2
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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.
2-B-1
Three SlidesThree Slides
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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.
2-B-2
Three SlidesThree Slides
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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?
2-B-3
Three SlidesThree Slides
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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
???
???
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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)
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
2-E2-E
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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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.
2-F2-F 54321
Bu
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Bu
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An
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An
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Key
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:
$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:
$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:
$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
NEFE High School Financial Planning ProgramNEFE High School Financial Planning ProgramUnit Two – Budgeting: Making the Most of Your Money
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