National Association of National Association of Black Black

Accountants, Inc.Accountants, Inc.

BudgetingBudgeting

M ney M ney $$enseense

Money Money ManagementManagement

What is one of the first What is one of the first steps to achieving your steps to achieving your

financial goals?financial goals?

BudgetingBudgeting

Purpose of a BudgetPurpose of a Budget

Allows you to examine how you Allows you to examine how you earn money and how you spend earn money and how you spend itit

Helps you use your money for Helps you use your money for your needs and wants while your needs and wants while achieving your goalsachieving your goals

Building Your BudgetBuilding Your Budget

Use personal finance softwareUse personal finance software List sources of incomeList sources of income Identify major expensesIdentify major expenses

Record every expenditureRecord every expenditure Cut back where necessaryCut back where necessary

Monitor regularlyMonitor regularly

Sample BudgetSample Budget

Gross monthly incomeGross monthly income Net incomeNet income Fixed expensesFixed expenses Flexible expensesFlexible expenses

Sample BudgetSample Budget

Discretionary expensesDiscretionary expenses Total it upTotal it up Increase your savingsIncrease your savings

Sample Budget Plan Sample Budget Plan AreasAreas

Monthly ExpensesMonthly Expenses

Housing Housing Child care & Child care & educationeducation

Insurance Insurance premiumspremiums

Mortgage/RentMortgage/Rent Child Child care/babysitters care/babysitters

Medical/dental Medical/dental insuranceinsurance

UtilitiesUtilities Education Education expenses expenses

Auto insuranceAuto insurance

Property taxesProperty taxes Consumer debtConsumer debt Home/renters Home/renters insuranceinsurance

Maintenance & Maintenance & SuppliesSupplies

Auto paymentsAuto payments Life insuranceLife insurance

FoodFood Credit card Credit card paymentspayments

Disability Disability insuranceinsurance

GroceriesGroceries Other debt Other debt paymentspayments

Other insurance Other insurance premiumspremiums

Dining OutDining Out ClothingClothing MiscellaneousMiscellaneous

TransportationTransportation Medical Medical ExpensesExpenses

Fun, vacations, Fun, vacations, traveltravel

Fuel & Fuel & MaintenanceMaintenance

Doctor; DentistDoctor; Dentist Church/charitiesChurch/charities

PrescriptionsPrescriptions OtherOther

Monitoring Your BudgetMonitoring Your Budget

Periodic reviewPeriodic review Envelope SystemEnvelope System Checking AccountChecking Account

Tips to Stay on TrackTips to Stay on Track

Involve the entire family: Agree on a Involve the entire family: Agree on a budget up front and meet regularly to budget up front and meet regularly to check your progress check your progress

Stay disciplined: Try to make budgeting Stay disciplined: Try to make budgeting a part of your daily routine a part of your daily routine

Start your new budget at a time when it Start your new budget at a time when it will be easy to follow and stick with the will be easy to follow and stick with the plan (e.g., the beginning of the year, as plan (e.g., the beginning of the year, as opposed to right before the holidays) opposed to right before the holidays)

Tips to Stay on TrackTips to Stay on Track

Find a budgeting system that fits your Find a budgeting system that fits your needs (e.g., budgeting software) needs (e.g., budgeting software)

Distinguish between expenses that are Distinguish between expenses that are "wants" (e.g., designer shoes) and "wants" (e.g., designer shoes) and expenses that are "needs" (e.g., groceries) expenses that are "needs" (e.g., groceries)

Build rewards into your budget (e.g., eat Build rewards into your budget (e.g., eat out every other week) out every other week)

Avoid using credit cards to pay for Avoid using credit cards to pay for everyday expenses: It may seem like everyday expenses: It may seem like you're spending less, but your credit card you're spending less, but your credit card debt will continue to increase debt will continue to increase

What You’ve LearnedWhat You’ve Learned

The purpose of a budget The purpose of a budget The benefits of a budget and how it The benefits of a budget and how it

worksworks How basic tools can help your How basic tools can help your

budget work for youbudget work for you

Financial literacy isn’t just a matter of knowing what you

have and knowing your options. It is a matter of planning for

life’s milestones.

Financial literacy isn’t just a matter of knowing what you

have and knowing your options. It is a matter of planning for

life’s milestones.

Thank You!Thank You!

National Association of Black National Association of Black Accountants, Inc.Accountants, Inc.

M ney $enseM ney $ense

For more information visit www.nabainc.orgFor more information visit www.nabainc.org

360 Degrees of Financial 360 Degrees of Financial LiteracyLiteracy

360 Degrees of Financial Literacy is a national 360 Degrees of Financial Literacy is a national effort of the CPA profession to improve the effort of the CPA profession to improve the financial understanding of Americans. It financial understanding of Americans. It provides a comprehensive approach to financial provides a comprehensive approach to financial education, focusing on the information education, focusing on the information Americans need at every life stage, from Americans need at every life stage, from childhood to retirement. CPAs volunteer their childhood to retirement. CPAs volunteer their time and expertise to educate members of their time and expertise to educate members of their communities about financial issues.communities about financial issues.

Visit Visit www.360financialliteracy.orgwww.360financialliteracy.org for tools to for tools to help you make sound financial decisions.help you make sound financial decisions.