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Spending PlansAdvanced Level2.05

2.2.5.G1What is a Spending Plan?Spending Plan for:Time Period: Planned AmountActual AmountIncomeEarned IncomeWages or salary before deductionsUnearned IncomeMoney from savings and investments to help pay expenses during this time periodReceived Income from Government ProgramsTotal Income$ $ExpensesDeductions Often Taken from PaychecksContributions to retirement programs (401k, 403b, pension, IRA)Federal income tax and state income taxSocial Security and MedicareSaving and Investing (Pay Yourself First)Contribution to savings and investmentsInsurance PremiumsHealth, automobile, home or renters, lifeHousing Costs Transportation CostsFood CostsFamily Member CareCommunication and ComputersTelephone landline, cell phone, Internet, cable/satellite televisionMedical Costs Not Covered by InsuranceClothing and Personal CareEducational ExpensesPet CareEntertainmentGifts and Charitable ContributionsCredit CostsStudent loan, credit card, other loan paymentsTotal Expenses$$ Net Gain or Net Loss (Income less Expenses) $$

An income and expense statement sometimes referred to as a budget which records both planned and actual income and expenses over a period of timeA budget

Take Charge Today August 2013 Spending Plans Slide #Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona2.2.5.G1Why is a Spending Plan an important part of financial planning?

Analyze the opportunity costs of your trade-offs to maximize financial well-beingHelps set and reach goalsHelp manage your money in a positive mannerIncrease net worth

Take Charge Today August 2013 Spending Plans Slide #Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona2.2.5.G1Money Management ToolsStatement of Financial Position Income & Expense StatementSpending PlanWhat is my financial position today?What is my future money management plan?How have I managed my money in the past?Make changesDetermine what changes to make

Take Charge Today August 2013 Spending Plans Slide #Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona2.2.5.G1A forward-looking Income and Expense Statement

May use the same template for both the Income and Expense Statement and the Spending Plan

Take Charge Today August 2013 Spending Plans Slide #Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona2.2.5.G1Spending Plan Development ProcessStep 1 - Track Current Income and Expense Step 2 - Personalize Your Spending PlanStep 3 - Allocate Money to Each CategoryStep 4 - Implement and ControlStep 5 - Evaluate and Make AdjustmentsDevelop the spending plan

Maintain the spending plan

Take Charge Today August 2013 Spending Plans Slide #Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at the University of Arizona2.2.5.G1