Make Your Money Matter: Use a Spending Plan Please download the - - PowerPoint PPT Presentation

Make Your Money Matter: Use a Spending Plan

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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

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Time Bound Attainable Realistic Measurable Specific State exactly what w ill be d

• ne

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.

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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

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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

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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

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Making Your Money Matter: Use a Spending Plan

Types of Expenses

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• 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

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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

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Making Your Money Matter: Use a Spending Plan

Step 4- Use the plan

– Look for changes that can be made

• r 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

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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

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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