CREATING A BUDGETSESSION # 2

DEFINITIONS REFRESHER

• Variable = changes every month

• Fixed = the same every month

• Estimate = a guess

• Income = money coming in

• Expenses = money going out

INCOME

• Let’s start by filling in an INCOME CHART

• Refer to the list we made last session, but this time include a monthly amount

TIPS

• If your income is different each month use the least amount of money you can receive…… if you make more, it’s BONUS!

TIPS

• Always UNDERestimate when working with income

•Do not include extras like over time or gifts because this is not guaranteed money

INCOME

• Total all of your income and enter it at the bottom of your chart

• Put your income chart aside for now

EXPENSES

• Fill in the EXPENSES CHART

• Refer to the list we made last session, but this time include a monthly amount

TIPS

• If you are tracking a bill that is a variable expense use the amount from the month that was the largest amount you have ever paid• Example: Your hydro bill might be $150 in July

because you run your air conditioner, but only $90 in September when the windows can be open

TIPS

• Always OVER estimate when dealing with expenses so you are prepared for a higher bill

EXPENSES

• Review your chart & make sure you haven’t missed a single expense

• Coffee?

• Cigarettes?

• Gambling?

• Alcohol?

• Fast food?

EXPENSES

• Total your expense chart and record the amount at the bottom of your chart

LET’S COMPARE

•Which number is higher?

• Income or expenses?

LET’S COMPARE

• If your income is higher, how much do you have left over at the end of each month?

• Income – expenses = ________

LET’S COMPARE

• If your expenses are higher than your income, how much money do we need to cut back by each month?

• Expenses – income = _________

MANAGING OUR MONEY

• Sometimes we don’t realize how much we are spending…

MANAGING OUR MONEY

• There are many ways we can be more financially organized

CHALLENGE!!

• Carry this notebook with you for the next 2 weeks

•Write down every single purchase you make

• In 2 weeks we will add everything up and determine whether you are aware of everything you spend money on

MANAGING OUR MONEY

• Save every receipt from every purchase you make each month

• Store them in a folder, an envelope, a shoe box, anything you have

• Add them up at the end of the month

MANAGING OUR MONEY

• Keep your monthly bills organized using a filing system that works for you

• Keep them in a safe place

MILESTONE # 9

• Read a course information package & course schedule

• Evaluates your ability to understand documents

NEXT CLASS

• Cutting back to balance your budget or save more

•Make sure to be using your notebooks, I will be checking for entries!