make your money matter: use a spending...
TRANSCRIPT
Make Your Money Matter:
Use a Spending Plan
1 Please download the Make Your Money Matter: Use a Spending Plan Worksheet
and Handouts before beginning this class.
Making Your Money Matter: Use a Spending Plan
SMART Goals
2
Time Bound Attainable Realistic Measurable Specific
State
exactly
what w ill
be d one
State the
dollar
amount
Determine
how it can
be reached
Set a goal
that is
realistic for
your
situation
and income
State when
the goal will
be reached
SMART Goals
Making Your Money Matter: Use a Spending Plan
What is a Spending Plan?
• A guide for spending money that is used to
record planned and actual spending over a
period of time.
• Plans should be written on paper or
electronic.
• Tell your money where to go instead of
wondering where it went.
3
Making Your Money Matter: Use a Spending Plan
Creating a Spending Plan
Step 1--Track current
income and
expenses
– Use a small
notebook to record
expenses
– Keep receipts
– Use cell phone note
pad
– Use debit card
records
1. Track Income & Expenses
2. Create Your Income & Expense
Categories
3. Assign Money to each
Expense Category
4. Use and implement your
plan
5. Evaluate & make
adjustments
4
Making Your Money Matter: Use a Spending Plan
Step 2—Create
personal income &
expense categories
– Customize to suit
your expenses.
1. Track Income & Expenses
2. Create Your
Income & Expense
Categories
3. Assign Money to each
Expense Category
4. Use and implement your
plan
5. Evaluate & make
adjustments
5
Creating a Spending Plan
Making Your Money Matter: Use a Spending Plan
Budget Components & Categories
• INCOME money you earn or receive on a
somewhat regular basis
– Wages/Salary
– Alimony
– Child Support
– Retirement income
– Social Security
– Public Welfare
– Disability income
• EXPENSES items you spend money on
– Savings/Emergency
– Food
– Housing
– Utilities
– Transportation
– Insurances
– Clothing
6
Making Your Money Matter: Use a Spending Plan
Types of Expenses
7
• Fixed Expenses: Stay the same each month
– Rent, house payment, utility bills on budget plans,
savings
• Variable Expenses: Changes or varies each
month
– Groceries/food, non-budget plan utility bills,
clothing, car repairs, gas
• Periodic Expenses: Come one or more
times each year at predictable times.
– Auto insurance, property taxes, water bills
Making Your Money Matter: Use a Spending Plan
Step 3—Assign
money to each
expense category
– Allocate your
income for the
expenses
– Income minus
expenses should
equal 0
1. Track Income & Expenses
2. Create Your Income & Expense
Categories
3. Assign Money to
each Expense Category
4. Use and implement your
plan
5. Evaluate & make
adjustments
8
Creating a Spending Plan
Making Your Money Matter: Use a Spending Plan
Factors Impacting Spending
• Needs - essential for daily living
• Wants - nice, but not necessary
• Values - beliefs, what is worthwhile,
desirable, or important to you
• Goals - what we want to achieve
9
Making Your Money Matter: Use a Spending Plan
Step 4- Use the
plan
– Look for changes
that can be made
or that need to
be made
1. Track Income & Expenses
2. Create Your Income & Expense
Categories
3. Assign Money to each Expense
Category
4. Use and implement your
plan
5. Evaluate & make
adjustments
10
Creating a Spending Plan
Making Your Money Matter: Use a Spending Plan
Step 5- Evaluate
the plan and adjust
– Are you reaching
your goals?
– Are there plan
changes that can
be made?
1. Track Income & Expenses
2. Create Your Income & Expense
Categories
3. Assign Money to each
Expense Category
4. Use/implement
your plan
5. Evaluate & make
adjustments
11
Creating a Spending Plan
Making Your Money Matter: Use a Spending Plan 12
Closing Thought
“Any man can make money, but it takes a
special kind of man to use it responsibly.”
A.G. Gaston, Businessperson
1892-1993