Budget Notes

Budget

Is a plan for making and spending money.

Fixed Expenses

Costs that do not change month to month

Variable Expenses

Expenses that vary from month to month.

________ is essential when it comes to personal finances, but before you can spend money, you need to create a ______; that way you can maintain practical and reachable __________.

Spending + budget + financial goals

short-term goal

is within the next couple of years. Example; you want to purchase a used car to travel to your school next year.

long-term goal

is from 5 years to forever. Example; you want to purchase a house after you graduate college. 

What are the 6 steps of the Rational Decision-Making Process?

1. Define the problem or opportunity.

2. Set goals and identify evaluation criteria.

3. Identity alternatives. 

4. Evaluate alternatives based on the evaluation criteria.

5. Choose the best alternative.

6. Implement the decision and monitor the results.

To be financially _______, you always want to ensure your ______ is always higher than your _______.

Savvy + income + expenses

Two examples of fixed expenses

Auto insurance or rent

Two examples of variable expenses

Entertainment, car repairs, electric bills, or doctor bills

What five things must you consider for budget and cost of living in your life?

1. Housing

2. Clothing

3. Food

4. Utilities

5. Transportation

What are the types of housing options?

House, apartment, rental, farm, government housing, condo, cabin, luxury estate

What are the types of transportation options?

Car, bicycle, public transportation, Uber, lease, own

____ is a ____ for all households, but you need to have a budget and know what types of food you want.

Food + need

What are the types of entertainment people spend their money on?

Friends, Family, parties, concerts, movies, etc.

If you ____________ a place, it is essential to have a budget set aside for _______, etc., for your place.

Rent or buy + furniture

__________ or __________ a part of life; it's smart to have ____________ to help protect yourself.

Illnesses + accidents are + health insurance

What are miscellaneous expenses?

There are other items that will be an expense in your life that weren’t mentioned today. That purely depends on your lifestyle of choice.

• Pets, gifts, technology, religious or political expenses, unplanned expenses: accidents, repairs, etc.

What is the way to categorize your budget?

1. Essentials 

2. Security

3. Goals

4. Lifestyle

5. Discretionary

Then it helps to continue to do the following with your budget:

1. Write down all your expenses

2.  Check it monthly

3.  Use technology to help, such as websites, apps, software, etc

What are 8 Budgeting Tips?

1.  Bargain shopping

2.  Reduce Spending

3.  Plan Ahead

4.  Be Realistic

5.  Look for deals, freebies, used items, etc

6.  Keep your goals in mind

7.  Avoid credit cards

8. Ask yourself, do you need it?

Transportation budget guidelines

15% - 20%

Housing budget guidelines

35%

Savings budget guidelines

S 5% - 10%

Food budget guidelines

10% - 20%

Medical budget guidelines

3%

Clothing budget guidelines

3% - 5%

Utilities budget guidelines

5%

Personal budget guidelines

P 5% - 10%

Debt Payments budget guidelines

D 5% - 15%

Share 3 budgeting resources.

1.  Local Banks

2.  Friends or family with experience in budgeting finances

3.  Online Resources