personal budgeting
DESCRIPTION
Personal Budgeting. Objectives. Identify the components of a personal budget and strategies for staying within one’s budget Describe the purpose for setting financial goals Develop short-, mid-, and long-term financial goals Evaluate the importance of financial planning. Key Vocabulary. - PowerPoint PPT PresentationTRANSCRIPT
Objectives
Identify the components of a personal budget and strategies for staying within one’s budget
Describe the purpose for setting financial goals
Develop short-, mid-, and long-term financial goals
Evaluate the importance of financial planning
Key Vocabulary
Balance Sheet Budget Deficit Discretionary
Expenses Discretionary
Income Financial Health Financial Planner Fixed Expense Income Inflows
Insolvency Outflows SMART goal SMART strategy Surplus Take-home pay Variable Expense
Needs vs. Wants
Divide the words into needs vs. wants
Which items are the most difficult to classify? Why?
Can an individual’s financial situation change her views of what is considered a need and what is considered a want? Explain.
Would you classify most of your own purchases as needs or wants? Explain
Needs vs. Wants
Do you purchase a new pair of basic shoes or the new Jordan’s for $150?
Wants change into needs Want a car turns into need a car for work
to provide for family/ self Vary based on financial situation,
family, religious, or cultural values
Simulation
Imagine that you are a single father running a computer repair business from your home. Refer back to your list of 25 words. How would your classifications of your needs and wants change based upon your life circumstances?
Financial Goals
Responsible money management can help you achieve your goals
Who would like to someday purchase a new car?
Who would like a new pair of shoes? Who would like to purchase a
computer?
Financial Goals
Refers to something, an item or product, that they want to buy or even a state of financial well-being that they hope to achieve.
List three financial goals that you have for the future.
Financial Goals
Short-term- within 1 year Mid-term- 1-3 years Long-term- More than three years
New shoes-short term Buy special jewelry for you Mom’s 50th
anniversary- mid-term College tuition- long term Retirement- long term
Financial Goals
Offers inspiration and motivation Make goals specific and attainable Flexible and realistic for your life
Financial Goals
Download: Reading- SMART Financial Goals
What does the acronym SMART stand for?
S M A R T
Financial Goals
Share one of your goals that you wrote from before
Take turns evaluating each other’s goal against the SMART criteria. Verbally discuss your goals and offer advice on specific changes in language that should be made
Compare your SMART goal with your original goal. In what ways will your new SMART goal be easier to attain?
Writing SMART goals
Download: Worksheet- Writing SMART Goals
Write your original goals out before SMART was introduced
Transform all three goals to SMART goals
Decide whether your goals are short, mid or long-term
Writing SMART goals
Long-term important to start early because usually their the most expensive
Organize income, expenses, and savings to achieve your goal
Introduction to Personal Budgeting
Download: Anticipation Guide- Budgeting
Contemplate the four statements, agree or disagree why?
Download: Reading- Budgeting Review section headings and
highlighted terms Does reading change any of your
answers?
Budgeting
Develop your taxonomies further but with terms about budgeting
3 minutes by yourself 3 minutes at your table 4 minutes walking around the room
Budgeting
What information is needed to create a budget?
Accurate records of money in and money out
Keep financial documents Receipts, paycheck stubs, tax forms, etc
Budget Analysis
Scenario cards passed out1. Carefully read through the scenario2. Underline sources of income3. Circle all expenses
Download: Worksheet- Monthly Budget Example You will not be using all of then columns
and rows Fill in the information specific to your
scenario
Budget Analysis
What other financial information would have been helpful to complete the budget outline?
What seemed to stand out in your scenario?
Download: Directions- Budget Analysis Summary How does the example reflect the
specific requirements in the directions?
Budget Analysis
Pair up and share budget analysis Download: Worksheet- Monthly
Budget Example Of the two scenarios, which financial
situation would you most like to see yourself in? Why?
List one improvement that you would make for each financial situation
Budget Analysis
What are the most important principles of budgeting you learned that will help you to be successful in life? Explain your answers.
Enrichment
Give students the opportunity and experience to create a real budget. During the first class period, instruct students to track their spending for at least the next week and preferably longer. Students must be diligent and should track even the smallest of purchases. At the end of the time period, have students classify everything they purchased as a need or a want and create a personal budget based off of their findings.
Enrichment
Instruct students to research the career of a budget analyst, focusing on such aspects as job requirements and certifications, work environment, earnings, outlook, and companies that employ budget analysts. Students should present their findings to the class.