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					Chapter 28
Planning a Budget
pp. 454-469




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Chapter 28
      Why It’s Important
      Budgeting techniques help you
      keep track of where your money
      goes so that you can make it go
      further.




Introduction to Business, Planning a Budget   Slide 2 of 59
Chapter 28
                           Lifestyle Costs
   Money management is the process of
   planning how to get the most from
   your income.




Introduction to Business, Planning a Budget   Slide 3 of 59
Chapter 28
                           Lifestyle Costs
   A budget is a plan for using your
   income in a way that best meets your
   wants and needs.




Introduction to Business, Planning a Budget   Slide 4 of 59
Chapter 28
                           Lifestyle Costs
   A budget includes a record of your
   expected income, your planned
   expenses, and your planned savings
   over a certain period of time.



Introduction to Business, Planning a Budget   Slide 5 of 59
Chapter 28
                           Lifestyle Costs
   The five steps in planning a budget
   are:
   • Setting your goals
   • Estimating your income
   • Estimating your expenses
                                              continued
Introduction to Business, Planning a Budget      Slide 6 of 59
Chapter 28
                           Lifestyle Costs
   • Planning for savings
   • Balancing and adjusting your budget
      as needed




Introduction to Business, Planning a Budget   Slide 7 of 59
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                                 Set Goals
   A budget should help you decide
   which goals you can meet with the
   amount of money you have.




Introduction to Business, Planning a Budget   Slide 8 of 59
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                        Estimate Income
   Your income is the actual amount of
   money you earn or receive during a
   given time period.




Introduction to Business, Planning a Budget   Slide 9 of 59
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                                 Gross Pay
   Your gross pay is the total amount of
   money you earned for a specific time.




Introduction to Business, Planning a Budget   Slide 10 of 59
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                                    Net Pay
   Your gross pay is reduced by various
   deductions, or amounts that are
   taken out of your pay before you
   receive your paycheck.



Introduction to Business, Planning a Budget   Slide 11 of 59
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                                    Net Pay
   Your net pay, or take-home pay, is
   your gross pay minus deductions.




Introduction to Business, Planning a Budget   Slide 12 of 59
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                            Other Income
   If your net pay is the only income you
   have to consider, it’s easy to figure
   your total income.
   If part of your income is from tips, don’t
   overestimate how much you expect to
   receive in tips.
Introduction to Business, Planning a Budget   Slide 13 of 59
Chapter 28
                                      Taxes
   Withholding, or subtracting taxes
   from a paycheck to be forwarded to
   the government, may include federal,
   state, and local income taxes.



Introduction to Business, Planning a Budget   Slide 14 of 59
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                                      Taxes
   Employers are responsible for
   forwarding the taxes that are withheld
   to the government.




Introduction to Business, Planning a Budget   Slide 15 of 59
Chapter 28
                                      Taxes
   Workers who don’t have all taxes
   withheld from their paychecks must
   budget for payment of those taxes.




Introduction to Business, Planning a Budget   Slide 16 of 59
Chapter 28
                     Estimate Expenses
   Items you have to spend money on
   such as food, rent, and clothing are
   called expenditures.




Introduction to Business, Planning a Budget   Slide 17 of 59
Chapter 28
                     Estimate Expenses
   The two basic types of expenses are:
   • Fixed expenses
   • Variable expenses



Introduction to Business, Planning a Budget   Slide 18 of 59
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                         Fixed Expenses
   Fixed expenses are expenses that
   occur regularly and that are regularly
   paid.
   For example, rent and insurance.



Introduction to Business, Planning a Budget   Slide 19 of 59
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                      Variable Expenses
   Variable expenses are expenses that
   fluctuate from month to month.
   For example, food and entertainment.




Introduction to Business, Planning a Budget   Slide 20 of 59
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                         Plan for Savings
   Savings protect you against expenses
   that you didn’t budget, that are higher
   than you expected, or that are
   completely unexpected.



Introduction to Business, Planning a Budget   Slide 21 of 59
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     Balance and Adjust the Budget
   The total estimated income for a
   period should equal the total estimated
   expenses.




Introduction to Business, Planning a Budget   Slide 22 of 59
Chapter 28
     Balance and Adjust the Budget
   The difference between how much you
   planned to spend and how much you
   actually spent is the budget variance.




Introduction to Business, Planning a Budget   Slide 23 of 59
Chapter 28
   Figure
    28.2    THE KEMALS’ FAMILY BUDGET


                                              A budget should be
                                              broken down into
                                              annual and monthly
                                              amounts for each
                                              category.

                                              Identify how much
                                              the Kemals spend
                                              on insurance
                                              payments.


Introduction to Business, Planning a Budget                 Slide 24 of 59
Chapter 28
   Using a Computer for Budgeting
   With a computerized budgeting
   program, you can store your budgeted
   amounts and enter your expenses as
   they occur or at the end of the month.



Introduction to Business, Planning a Budget   Slide 25 of 59
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   Using a Computer for Budgeting
   The computer can give you a quick
   analysis of total expenses, including
   amounts that are over and under the
   budget.



Introduction to Business, Planning a Budget   Slide 26 of 59
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   Using a Computer for Budgeting
   In addition, the computer can help with
   “what if” situations.
   For example, what if Nora Kemal’s
   income increased by ten percent, or
   their rent increased by $50 a month?

Introduction to Business, Planning a Budget   Slide 27 of 59
Chapter 28

    HW page 466-467 # 1-18




Introduction to Business, Planning a Budget   Slide 28 of 59

				
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