Lesson 3 Art of Budgeting

Teens

lesson three

the art of budgeting

presentation slides

What are your goals?

Why set your goals?

Open Ended

My educational goals include

Open Ended

My social goals include:

Open Ended

My financial goals include:

Open Ended

My family goals include:

Open Ended

My health goals include:

Open Ended

My recreational goals include:

Open Ended

My most number 1 prioritized goal is:

Where does my money come from?

Where does my money go?

the budgeting process

phase 1: Assess your personal and financial situation (needs, values, life situation).

phase 2: Set personal and financial goals.

phase 3: Create a budget for fixed and variable expenses based on projected income.

phase 4: Monitor current spending (saving, investing) patterns.

phase 5: Compare your budget to what you have actually spent.

phase 6: Review financial progress and revise budgeted amounts.

teens – lesson 3 - slide 3-A

goal-setting guidelines

teens – lesson 3 - slide 3-B

well-written personal and financial goals SHOULD:

•be realistic
A student working part-time is not likely to be able to afford a new car every couple of years.

•be specific
“I want to save $5,000 for a down payment to buy a house.”

•have a timeframe
“I want to pay off my credit card within the next 18 months.”

•state the action to be taken
“I want to start an automatic deposit savings account with monthly withdrawals from my
checking account.”

setting up and maintaining a budget

teens – lesson 3 - slide 3-Ca

income

budget

actual

difference

Job #1

$

$

$

Job #1

$

$

$

Other

$

$

$

total monthly
income

$

$

$

expenses

budget

actual

difference

fixed regular expenses

Rent

$

$

$

Car insurance

$

$

$

Car payment

$

$

$

Credit card

$

$

$

fixed irregular expenses

Savings

$

$

$

Food

$

$

$

Utilities

$

$

$

setting up and maintaining a budget (continued)

teens – lesson 3 - slide 3-Cb

expenses

budget

actual

difference

transportation

Bus fare

$

$

$

Gas and oil

$

$

$

Parking and tolls

$

$

$

Repairs

$

$

$

other

Medical expenses

$

$

$

Clothing

$

$

$

Entertainment

$

$

$

Household items

$

$

$

Personal items

$

$

$

Tuition

$

$

$

School expenses

$

$

$

total monthly
expenses

$

$

$

Multiple Choice

The budgeting process starts with monitoring current spending.

• True

• False

Multiple Choice

Most short-term goals are based on activities over the next two or three years.

• True

• False

Multiple Choice

A common long-term goal for parents of a newborn child may involve saving for college.

• True

• False

Multiple Choice

Rent is considered a fixed expense.

• True

• False

Multiple Choice

Flexible expenses stay about the same each month.

• True

• False

Multiple Choice

The final phase of the budgeting process is to:

• set personal and financial goals

• compare your budget to what you have actually spent

• review financial progress

• monitor current spending patterns

Multiple Choice

An example of a long-term goal would be:

• an annual vacation

• saving for retirement

• buying a used car

• completing college within the next six months

Multiple Choice

A clearly written financial goal would be:

• “To save money for college for the next five years”

• “To pay off credit card bills”

• “To invest in an international mutual fund for retirement”

• “To establish an emergency fund of $4,000 in 18 months”

Multiple Choice

An example of a fixed expense is:

• clothing

• auto insurance

• an electric bill

• educational expenses

Multiple Choice

_____ is commonly considered a flexible expense.

• Rent

• A mortgage payment

• Home insurance

• Entertainment