Budgeting: Using Your Money WiselyMegan Hunley

What You Will Learn Be Able to:

Identify Sources of Income Identify Types of Expenses Understand the Importance of Saving Construct a Budget

Using the PowerPoint To answer the questions during the quiz, just click on the answer. It

will then tell you if you got the answer right. You will see these buttons throughout the presentation. They will

help you navigate through the lesson. When you take the quiz and get a question wrong you have the

option to get a hint which takes you to the slide where you learned the information. The slide will then have a link that says “question” that will take you back to the quiz question you were on.

Home Page Previous Next Slide Slide

HomePick which part of the presentation you would like to go to, or use the “Next Slide” arrow to start from the beginning.

Income Expenses

Savings

Budget

Income Cash Flow: Refers to the money you have coming in

as well as the money you have going out.

Income: Any money you receive

Examples of Income: Money earned from a job, allowance, birthday money, money from selling your things, or the interest earned on a savings account

Skip to QuizQuestion 1 Question 2

Income cont. If you already work, you

may have been surprised when you received your first paycheck because it was less than you expected! This is because of deductions.

Why do you need to know about income and all the different types of income especially when it comes to a paycheck? So you will know how much money you have to get the things you need and want. Also, so you will not end up like Rachel in the clip.

Example Paycheck

Gross Income Gross Income or Earnings: Total

amount of income from your

wages before deductions.

Ex: If you worked 10 hours and were paid $10 an hour your gross income

would be $10010x10=100

Question 3

DeductionsDeductions: When an employer subtracts

money for a number of items before writing

you thecheck. For most

people, taxes are the biggest deductions. Taxes are fees that

support government programs and are

required by law to be applied to

income, property, or goods.

Question 4

Examples of DeductionsExample of

Tax Deductions

Examples of DeductionsOther

Deductions: When your

older you may request to

have money from your

paycheck go directly towards

savings or insurance.

Net Income

Net Income/Net Pay: “Take-home pay.”

Income after deductions.

Question 5

Quiz1. What is cash flow? A. Any money you receive

B. Total amount of income from your wages before deductions

C. Refers to the money you have coming in as well as the money you have going out.

D.“Take-home pay.”

Quiz2. What is income? A. When an employer subtracts money for a number of items before writing you the check.

B. Refers to the money you have coming in as well as the money you have going out.

C. Total amount of income from your wages before deductions

D. Any money you receive

Quiz3. What is gross income? A. Total amount of income from your wages before deductions B. When an employer subtracts money for a number of items before writing you the check. C. “Take-home pay.” D. Any money you receive

Quiz4. What are deductions? A. Any money you receive B. When an employer subtracts money for a number of items before writing you the check. C. Refers to the money you have coming in as well as the money you have going out. D. “Take-home pay.”

Quiz5. What is net income? A. Any money you receive B. Total amount of income from your wages before deductions C.“Take-home pay.” D. When an employer subtracts money for a number of items before writing you the check.

Awesome Job!You got the answer right! Keep up the great work!

Try AgainWrong answer. Click here for a hint.

Awesome Job!You got the answer right! Keep up the great work!

Try AgainWrong answer. Click here for a hint.

Awesome Job!You got the answer right! Keep up the great work!

Try AgainWrong answer. Click here for a hint.

Awesome Job!You got the answer right! Keep up the great work!

Try AgainWrong answer. Click here for a hint.

Awesome Job!You got the answer right! Keep up the great work!

Try AgainWrong answer. Click here for a hint.

Expenses Why do you need to learn about expenses?

So you know how to budget for changing expenses. To start thinking about what expenses are important so

you do not end up like Kevin. He used money on expenses he did not need and could not pay off.

Skip to Activities

Fixed Expense Cost the same amount every time. You

typically know what you need to pay each month.

Examples:

Skip to Activities

Car Payment

Mortgage

Variable Expense Changes in amount, so you will usually

have control over how much they will be.

Examples:Groceries Gas

Occasional Expense Ones you do not pay every month and

can be either fixed or variable Examples:

Skip to Activities

Car InsuranceCar Repairs

Unnecessary Expense Something you do not need. Something you want less than another

item Examples of Unnecessary Expenses: Take-Out

Music Going to the Movies

Going to a Coffee Shop

Make a list of all the things you bought this past week on a sheet of paper then fill out this table. Write each of your expenses underneath the correct title. If one of your expenses is fixed then write it under fixed. If it is also unnecessary then write it there as well. Have a teacher check your work when you are done.

Fixed Variable Occasional Unnecessary

Savings Why do you need to save?

You need to save in order to get the items and experiences that are the most important to you.

You really want a car, so instead of spending money everyday on buying a latte from Starbucks, you should put the money aside for buying a car.

You also need savings for occasional needed expenses like car repairs after you buy your car.

You do not want to end up like Rebecca. She would have been able to purchase her scarf if she had savings.

Skip to Activities

Pay Yourself First (P.Y.F) Set aside a certain amount of money

from your paycheck into an account to meet a short-term or long-term financial goal.

Save your money to be able to purchase something you really need or want later.

Skip to Activities

This is how you figure out how much to save each month to meet a financial goal.The Simpson family wants to buy a new refrigerator for the kitchen. Mr. Simpson has visited several stores and estimates that it will cost around $700 to buy and install the type of refrigerator the family wants. If their goal is to buy it in six months, how much do they need to save each month?

Skip to Activities

This is how you figure out how much to save each month to meet a financial goal.The Simpson family wants to buy a new refrigerator for the kitchen. Mr. Simpson has visited several stores and estimates that it will cost around $700 to buy and install the type of refrigerator the family wants. If their goal is to buy it in six months, how much do they need to save each month?

The equation: Cost of the item/when you want to buy the item=how much you should save each month

Skip to Activities

This is how you figure out how much to save each month to meet a financial goal.The Simpson family wants to buy a new refrigerator for the kitchen. Mr. Simpson has visited several stores and estimates that it will cost around $700 to buy and install the type of refrigerator the family wants. If their goal is to buy it in six months, how much do they need to save each month?$700-cost of item6 months-when they want to buy the item

Skip to Activities

This is how you figure out how much to save each month to meet a financial goal.The Simpson family wants to buy a new refrigerator for the kitchen. Mr. Simpson has visited several stores and estimates that it will cost around $700 to buy and install the type of refrigerator the family wants. If their goal is to buy it in six months, how much do they need to save each month?

700/6= 116.67

Skip to Activities

Now it’s your turn. Type the answer into the white box and have a teacher check it before you move forward.The Mencias want to buy their oldest daughter acomputer to take to college next year. They’veshopped around and think they can get a gooddesktop computer with all the software and aprinter for about $1,100. With 15 months tosave, how much do they need to set aside eachmonth?$1,100 ÷ 15 =

Budget A plan for

managing your money during a given period of time.

Skip to Activities

Now the fun part…Making a Budget!

Why make a budget? You need to make a budget to make sure

you pay what you need to pay and spend money on things you really want.

Skip to Activities

Step 1 First, decide the

time frame for tracking your income and expenses.

Skip to Activities

Jackson's Monthly Budget

Estimated Income:Paycheck (after taxes) $2,100Interest Earned 50Total Estimated Income: $2,150

Fixed Expenses:Savings (P.Y.F.) $500Car Payment 325Rent 750Cable TV/Internet 75

Estimated Variable Expenses:Utilities 150Food 200Gas 100

Periodic Expenses:Car Insurance ($300/6 months) 50

Total Expenses $2,150

Total Income $2,150 – Total Expenses 2,150 $ 0

Step 2 List all the money

you have coming in. It’s helpful to break it down into categories—such as work, allowance, and “other” for gifts of money, or money you make from selling your stuff. Then total all your income.

Skip to Activities

Jackson's Monthly Budget

Estimated Income:Paycheck (after taxes) $2,100Interest Earned 50Total Estimated Income: $2,150

Fixed Expenses:Savings (P.Y.F.) $500Car Payment 325Rent 750Cable TV/Internet 75Estimated Variable Expenses:Utilities 150Food 200Gas 100Periodic Expenses:Car Insurance ($300/6 months) 50

Total Expenses $2,150

Total Income $2,150 – Total Expenses 2,150 $ 0

Step 3 You need to make

categories for each ofyour expenses. Don’t forget to include P.Y.F.! If you divide your expense categories into fixed and variable, it’ll be easier to see which ones you can adjust, if necessary.Remember, you should have a category foreverything you regularly spend money on.Then total your expenses.

Skip to Activities

Jackson's Monthly Budget

Estimated Income:Paycheck (after taxes) $2,100Interest Earned 50Total Estimated Income: $2,150

Fixed Expenses:Savings (P.Y.F.) $500Car Payment 325Rent 750Cable TV/Internet 75

Estimated Variable Expenses:Utilities 150Food 200Gas 100

Periodic Expenses:Car Insurance ($300/6 months) 50

Total Expenses $2,150

Total Income $2,150 – Total Expenses 2,150 $ 0

Step 4Subtract your total expenses from your totalincome. If the number is negative, you need to go back and adjust some of your variable expenses until the number is a zero.If it’s a positive number, you may want to think about adding some to your P.Y.F. line so you can reach your goals a little faster!

Jackson's Monthly Budget

Estimated Income:Paycheck (after taxes) $2,100Interest Earned 50Total Estimated Income: $2,150

Fixed Expenses:Savings (P.Y.F.) $500Car Payment 325Rent 750Cable TV/Internet 75

Estimated Variable Expenses:Utilities 150Food 200Gas 100

Periodic Expenses:Car Insurance ($300/6 months) 50

Total Expenses $2,150

Total Income $2,150 – Total Expenses 2,150 $ 0

Skip to Activities

Build Your Own BudgetTake your own income and expenses and make a monthly budget. Make sure your total expenses do not exceed your total income. Use the table to make your budget and remember to have a teacher check it when you are done.

Monthly BudgetEstimated Income

Total Income

Fixed Expenses

Variable Expenses

Occasional Expenses

Total Expenses

Total Income-Total Expenses

Yay You’re Done!