Creating A Budget PlanThat Makes “Cents” for

you!

What We’re Going to Cover Today

A Little Quiz FirstTerms Related to Money & BudgetingDividing your “Needs” from your “Wants”Tools & Types of Budget SheetsWhat goes in a budget sheetCalculating Income & ExpensesMore on Calculating Income & Expenses (2 & 3)When Expenses Exceed Income (1 & 2)Methods of Bill PayingTips & Tricks to save moneyQ&A & Wrap-up

What Do Each of These Words Mean?

Budget Gross Income BalanceFixed Net Income Revenue

Variable Interest Expense Credit Accrue Charges

A Little Quiz First

What Each of These Words Mean

Budget – A plan for how you will spend your moneyExpense/Charge – The cost of goods and servicesIncome/Revenue – How much you earn or receiveGross – How much you receive before tax deductedNet – How much you receive AFTER tax deductedBalance –The amount you have left. Interest – Added costsFixed – Items that stay in the same price and must be paid (i.e., RENT)Variable – Items that differ in price and may not always be needed

Dividing Your “Needs” from Your “Wants”

Things I Need

Things I Want

Things thatCan happen

Events & Special

occasions

My Plan For May 2015

Tools & Types of Budget Sheets

Tools & Types of Budget Sheets 2

May Monthly Budget Sheet 2015

Week of April 4, 2015

Rent Due

GasDue

LightDue

Phone Due

Will Pay

Water Due

Credit C. Due

Store Bill

Credit C. Due

WillPay

Rent Due 7th Light Due 13th Credit Card Due 5th Store Bill Due 10th Will Pay all on the 4th

What Goes on a Budget Sheet?

Bills to be Paid for 4/2015 Total Budget = $696.28 $ 752.46 Date Due

Current Bills

Requested Amounts

Paid Amt. Date Paid

Confirmation Numbers

Balances Left

Fixed Expenses• Rent• Light• GasFixed, Variable Expenses• Food• Transport• ClothingProbable Emergency Expenses• Health• Lost, Stolen, Items• otherVariable Expenses• Movies

Calculating Income & Expenses

My Earnings1. Work

2. SSI3. Babysitting4. Cleaning

$424.85 $252.00

$100.00$ 80.00

$856.85My Expenses1. Rent $

350.002.Light3. Gas4. Cable

$ 90.00 $ 87.50$ 115.00 $ 642.50

Step 1: Total Your IncomeStep 2: Total Your ExpensesStep 3: Calculate the Balance

POST IT NOTE

S 856.85 $ 642.50 $ 214.35

incomeExpense

BALANCE

More on Calculating Income & Expenses

Step 1 Total Your Income• If you need to know how much you make in a

month then make sure that you first obtain the totals from the money coming in, more than once a month. An example is when you receive checks from work; depending on the type of job being done checks may be received weekly or bi-weekly. Multiply the check by 2 (if bi-weekly), or by 4 (if weekly) to figure out how much is received for the entire month.

• For monthly earnings, total the resulting figures from Step 1 with income received only once monthly. For example: SSI and SSDI checks are received 1 time at the beginning of each month.

• ALL Income is important income. If doing an “odd job” like babysitting a friend’s home while she’s/he’s on vacation, then count it.

POST IT NOTEWork = 450.00 x2= 900.00SSDI = 375.00 = 375.00Cleaning = 100.00 x4= + 400.00

Total Monthly Income =1,675.00

More on Calculating Income & Expenses (2)

Step 2 Total Your Expenses• When figuring out how much you owe in terms

of expenses, write the total balance owed on each item, not what is only being asked of you to pay. For example: If you have a credit card debt of $300.00 and the bill statement suggests that you only pay $50.00 for the month, jot down $300. 00.

• DO NOT MULTIPLY RE-OCCURRING BILLS like Rent. If your Rent is $525.00 per month then that’s all you add.

• Any expenses that were not predicted but still happened must be counted for that month’s calculation. For example: If someone throws a stone and breaks your window then the cost of the repair must be calculated in too.

• Food, Entertainment, and Transportation expenses should be included. Estimate how much is needed for each.

POST IT NOTEWork = 450.00 x2= 900.00SSDI = 375.00 = 375.00Cleaning = 100.00 x4= + 400.00

Total Monthly Income =1,675.00VISA = 300.00Rent = 525.00Repair = 389.50Groceries = 250.00Bus Fair = 60.00Theater = 40.00Total Monthly Expenses =1,564.50

More on Calculating Income & Expenses (3)

Step 3 Subtract the Results to Obtain the Balance• The purpose for finding out the remaining

balance is to see how much you have left over. If your income exceeds your expenses this is wonderful because then you have the option to save, use the money for something fun, or put the remaining funds into a bill.

• If your expenses exceed your income, DON’T PANIC. There are ways to work around this and still be able to save.

• To obtain the Balance, subtract the resulting Income from the resulting Expense amount.

POST IT NOTEWork = 450.00 x2= 900.00SSDI = 375.00 = 375.00Cleaning = 100.00 x4= + 400.00

Total Income =1,675.00

VISA = 300.00Rent = 525.00Repair = 389.50Groceries = 250.00Bus Fair = 60.00Theater = 40.00Total Expenses =1,564.50

Total Balance =110.50

1,675.00 – 1.564.50 = 110.50

When Expenses Exceed Income

Have you ever heard of the phrase “Living beyond your means?” Well this basically means that expenses you have exceed the income you have. You are literally in debt and if you’re not careful, you could end up bankrupt. Here’s what to do before debt consumes you.

When Expenses Exceed Income (2 )

Tips and Tricks • A Billing Cycle is the period of time that lapses from one payment date to the next.

During this period, your bill accrues interest. Knowing how many days there are between cycles and being aware of the interest rate can prevent you from missing a payment and from being low on funds.

• When your billing statement comes jot down the date it came, and the date the bill is due. This will help you remember to get the payment on, or before the date due.

• Every billing statement provides you with the current balance and gives you a suggested payment to make. Always try to pay a little more than what is being requested. For example: Credit card and store card bills may suggest that you put down $25.00 on a balance that’s $300.00. If you put down only what is asked you are not going to see progress when that bill is sent back to you next time. What most don’t know is that a good $18.00 out of the $25.00 dollar payment goes towards the interest and only $7.00 will go to the bill itself. By adding more to your payment you will see the difference and less interest will be tacked on to the next billing statement.

• If you can’t put extra, pay what they ask and then go back and put more when your next check comes. This is easiest done when paying online.

• When a bill just can’t be paid easily, call the company and see if there are programs that can help. For example: Gas, Light, and Phone have programs that put payers on a budget system. Credit card carriers can either extend the deadline for when the payment’s due or lower the interest rate.

Methods of Bill Paying

Methods of Bill PayingAdvantages• Check or Money

Order can be used• Paper can be

tracked down if lost or stolen

Drawbacks• Process is too slow• Can get lost or stolen• Loss of trees

Advantages• Process is quick• Can be done at any

time for most bills• Relatively little to

no assistance needed

Drawbacks • Extra fees may apply to

use the service• May not recognize your

voice instructions• May be busy or cut you

offAdvantages• Service is curteous

& friendly• Mistakes can be

corrected on the spot

• Can gurantee payment will be done

Drawbacks • Waiting in line• No parking, cold

weather, & inaccessible• Negative treatment by

representatives

Methods of Bill PayingAdvantages• Online Banking

keeps bills in an organized manner

• Can be done 24/7• Can set it to

automatic bill pay on designated dates

Drawbacks• Process can fail due to

issues with the website • Bank website can be

hacked• Can forget a payment was

made and accidentally overspend

Advantages• Direct Bill Pay Website

is easy to follow • Can view the bill

before it’s sent by mail

• Can access 24/7 • Can set up automatic

payments

Drawbacks• Process can fail due to

issues with the website • Website can be hacked• Can forget a payment was

made and accidentally overspend, if set to auto-pay

• May take more than 2 days before deductions appear in your bank statement

A Review of Tips & Tricks, & Q&A