9.__Managing_Your_Money by shuifanglj


									Managing Your Money
• A budget is a planning tool that can be used
  to help you manage your money.
• The idea of a budget is to stretch
  purchasing power and raise the budgeter's
  standard of living.
• Income
• Expenses
  – Fixed expenses – expenses that remain the same each
    month. Examples of fixed expenses include rent, car
    payments, insurance, monthly savings plan, etc.
  – Variable expenses – expenses that change each
    month. Examples are clothing, food, entertainment, etc.
• Compare expenses to income. When all is said
  and done, Sonny's cash balance should be zero;
  that is, income and expenses should be equal.
  – What would Sonny have to do if his expenses
    exceeded his income?
  – What could Sonny do if he had money left over after
    deducting all his expenses
        Sample Budget
• Sonny Cruz, a full-time tour
  guide, has an annual salary
  of $15,000.
• After he pays his taxes and
  health insurance, his annual
  salary is $12,000.
• This is what Sonny's
  monthly budget looks like:
                   Sample Budget
• Income (after tax & health insurance)    $1000
• Savings interest earned                  $    4
• Total Income                              $1004
• Fixed Expenses:
Housing/Utilities                           $350
Telephone                                   $30
Transportation                              $200
Credit/Student Loan                         $100
Savings                                     $ 71
Total Fixed Expenses                        $751
Variable Expenses
Clothing/Personal Care                     $50
Food                                       $110
Household Supplies                         $25
Medicine/Health Supplies                   $18
 Entertainment                             $ 50
Total Variable Expenses                    $253
Total Expenses                            $1004
Total Cash Available$1004 Less Total Expenses$1004 Cash Balance$   0
                Plan the Prom
• Your class has been engaged in various fund-raising
  projects during the past several years, and you now
  have a total of $9,635 to spend on a big bash - your last
  school dance. You may not spend more than this
  amount on the dance, but you do not have to spend all of
  it on the dance. Any money "left over" can be used for a
  class project, designed to help your school or
• You have decided that there are three categories of
  expenditures for the dance. 1) hiring a band, 2) renting a
  place to hold the dance, and 3) providing refreshments
  and decorations. A committee has provided the following
Budget: $9,635
 Tracking Your Checking Account
• Today, checks and debit card transactions
  are debited from a checking account very
  quickly. If you write a check and do not
  have the money in your account you
  “bounce” a check.
• The bank returns the check to you unpaid,
  and the bank will charge you a fee
• Sometimes when this happens you would
  have written several checks and you get a
  fee for each one. It adds up!
 Tracking Your Checking Account

• The bank gives you an organizer with your
  checks called a check register, this
  organizer gives you a place to keep track
  of the activity in your account.
  Tracking Your Checking Account
Your activities are when:
• you deposit money in your checking account
• you write a check
• you use your debit card
• you deduct a fee that the bank charges
• you withdraw money from your account
The trick is to keep up with it at the moment and
  not try to remember to fill it in later. It is very
  easy to forget to write in the times you use debit
Check Register
                   Check Register

Number/Code: If you've written a check, put the check number here. Or use
  a transaction code: DC for Debit Card, ATM or a cash withdrawal, D for
  Deposit, and T for a transfer to your savings account, etc.
Date: Always record the date of anything you do.
Description of transaction: Make a quick note:
• Pizza -- Kate's birthday (note for ATM withdrawal)
• The Mart, school supplies (note for a check)
• Paycheck for August 15-31(note for a deposit)
Payment/Debit: Here you record the amounts of money going out of your
Deposit/Credit: Here you record the amounts of money coming into your
            Check Register
• As you enter each item, date it. Then in
  the far right column, either add or subtract
  to reach a new total.
• Make yourself record information at the
  time you write the check, use the ATM, or
  make the deposit.
• Two days later, you won't remember what
  you did.
Writing the check
              Check Register

•   Enter the check number
•   Date
•   Description (house payment, phone, cable…)
•   Check amount or deposit amount
•   Balance after each transaction
Your Turn…
Online Project
 **Net Docs
                 Step 1
• Choose a career that interests you.
• Divide that amount by 12 so you will know
  how much money you will make each
• This is the starting amount you will use on
  your check register
                 Step 2
1. Use your Budget Category list and fill in
   any other expenses you may have in the
   “You” column.
2. Estimate the amount of money you will
   spend in each category. (except house
                  Step 2
• Go online to Century21.com. Find a house
  or apartment in a city where you would like
  to live.
• Click on the calculator to determine your
  monthly house payment.
• You will need to create a Word document for
  the following steps.
• For the house and car, press the “Print Scrn”
  key and paste to the document.
Copy this screen
Copy this screen
 Enter this
amount into
your Budget
                 Step 3
• Go online and find a car you would like to
  purchase – new or used.
• Calculate the monthly payment.
• Enter the amount in your Budget Chart
                Step 4
             Car Insurance
• Go online to the insurance agency of your
  choice (Geico, State Farm, Farm
• Get an insurance estimate for the type of
  car you are purchasing.
• Enter the amount into your Budget Chart
                   Step 5
• Create a list of the items you will need for one
  weeks worth of groceries.
• Include food for meals, snacks, drinks
• Use the sale papers to determine the best prices
  for EACH item.
• Write the price for each item on your list and by
  each item the initial of the store. (FL,B,L)
• Total up you grocery bill for the week and
  multiply by 4. (monthly total)
• Enter the amount into your budget chart
Click on the picture to a quiz
 on becoming a millionaire.
 Enter this
amount into
your Budget
• Complete the process for each category.
• When you are satisfied with your budget
  write your checks and enter the amounts
  in your check register.
• For debit transactions, enter the amount
  and descriptions in the register
• For savings, enter the amount and write
  “savings” in the transaction types column.
• Do the math for each transaction.
         Writing the check
• Fill in the check number on the blank
  beside the “10”
• Begin with “01” (1001)
• Write your name and the address of the
  home you have chosen in the top corner
•   Math
•   Completeness of the check register
•   Accuracy of budget estimates
•   Thoroughness of grocery list
•   Check written correctly & the amount
    matches the register

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