Lifestyle Costs Money management is the process of planning how to get the most from your money.

Download Lifestyle Costs Money management is the process of planning how to get the most from your money.

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  • Lifestyle Costs Money management is the process of planning how to get the most from your money.

  • Lifestyle Costs A budget is a plan for using your money in a way that best meets your wants and needs.

  • Lifestyle Costs A budget includes a record of your expected income, your planned expenses, and your planned savings over a certain period of time.

  • Lifestyle Costs The five steps in planning a budget are:Setting your goals Estimating your income Estimating your expensesPlanning for savingsBalancing and adjusting your budget as needed

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  • Set Goals A budget should help you decide which goals you can meet with the amount of money you have.

  • Estimate Income Your income is the actual amount of money you earn or receive during a given time period.

  • Gross Pay Your gross pay is the total amount of money you earned for a specific time.

  • Net Pay Your gross pay is reduced by various deductions, or amounts that are taken out of your pay before you receive your paycheck.

    Your net pay, or take-home pay, is your gross pay minus deductions.

  • Taxes Withholding, or subtracting taxes from a paycheck to be forwarded to the government

    Federal, State & City, Social Security, Medicare, Option (health, pension)

  • Taxes Employers responsibility -- forward taxes withheld to government

    If not all taxes withheld from checks then must budget for payment of those taxes later

  • Taxes When accept job, complete W-4 which states withholding

    In January receive W-2 which shows your earnings and what taxes paid in. This is submitted with your tax return.

  • Other Income If your net pay is the only income you have to consider, its easy to figure your total income. If part of your income is from tips, dont overestimate how much you expect to receive in tips.

  • Estimate Expenses Items you have to spend money on such as food, rent, and clothing are called expenditures.

  • Estimate Expenses The two basic types of expenses are: Fixed expensesVariable expenses

  • Fixed Expenses Fixed expenses are expenses that occur regularly and that are regularly paid. For example, rent and insurance.

  • Variable Expenses Variable expenses are expenses that fluctuate from month to month.For example, food and entertainment.

  • Plan for Savings Savings protect you against expenses that you didnt budget, that are higher than you expected, or that are completely unexpected.

    PYF

  • Balance and Adjust the Budget The total estimated income for a period should equal the total estimated expenses.

    If you spend more than you planned, you will have a deficitIf spent less, your will have a surplus

  • Graphic OrganizerPlanning a BudgetGraphic Organizer

    Set Goals

    Estimate IncomePlan for SavingsBalance and Adjust the BudgetEstimate Expenses