budgeting
Download
Skip this Video
Download Presentation
Budgeting

Loading in 2 Seconds...

play fullscreen
1 / 24

Budgeting - PowerPoint PPT Presentation


  • 116 Views
  • Uploaded on

Budgeting. “Pay Yourself First”. Personal Budget. Working Tool Take Control Directs flow of cash received towards financial goals Must be Flexible! Takes discipline. Creating a Budget. ?. Reasons for a Spending Plan. …Helps you determine where you are spending your money currently.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Budgeting' - finna


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
budgeting

Budgeting

“Pay Yourself First”

personal budget
Personal Budget
  • Working Tool
  • Take Control
  • Directs flow of cash received towards financial goals
  • Must be Flexible!
  • Takes discipline
reasons for a spending plan
Reasons for a Spending Plan
  • …Helps you determine where you are spending your money currently.
  • …Helps you decide where to spend your money in the future.
  • …You have an organized way to save for things that cost more.
  • …Puts you in control of your financial future, beginning NOW.
people without a budget
People Without a Budget…
  • …Are less likely to know what they have.
  • …Have no plan, often coming up short before their next paycheck or allowance.
  • …Are almost certain to have no plan to save for more expensive spending goals.
pay your elf first
PAY YOUR$ELF FIRST!

S

etting aside money for “big ticket items”

A

voids borrowing, which costs you a lot! It’s a

V

ery wise thing to do, because

E

very time you pay yourself first, you are developing asaving habitthat leaves you with more money to spend later on for things that are really important to you!

2 parts of budgeting
2 Parts of Budgeting
  • 1. Income: Money Received from any source (limited source)
  • 2. Expenses: Money spent to satisfy needs/wants
gross vs net
GROSS VS NET
  • Gross pay is the total amount you earn before any deductions are subtracted.
    • $6.50 X40=$260.00
  • Net pay is the amount you “take home” after deductions.
  • Overtime is time worked beyond the regular hours
  • A standard workday is 8 continuous hours with scheduled breaks plus an unpaid lunch period.
  • A standard work week is 40 hours in a 5 day period of time.
overtime
OVERTIME
  • Fair Labor Standards Act states that:
    • “employers must pay hourly workers for overtime at the rate of 1 1/2 times the regular rate of pay.”
  • So… if regular pay is $6.50, then overtime would be $9.75.
    • 40 hours X $6.50 = $260.00
    • 5 hours X $9.75 = $48.75
    • Gross pay = $308.75
paycheck stub
Paycheck Stub
  • Salaried employees do not receive additional pay for overtime work.
  • Their gross pay is the same month after month.
  • The employer divides the salary into equal amounts for each pay period.
  • Under the “YTD” heading, your gross pay is added up throughout the year.
income payroll deductions
Income- Payroll Deductions
  • Money subtracted from Gross Income:
    • Union Dues
    • Health Insurance
    • Savings plans
    • Taxes

Taxes are the largest deductions-required by law

4 payroll taxes
4 Payroll Taxes
  • 1. Federal Income Tax
  • 2. State Income Tax
  • 3. Social Security Tax (FICA)
    • May be able to collect at age 62, average payout $1,230 per month
  • 4. Medicare Tax (FICA)
    • Can collect at age 65
  • FICA- Federal Insurance Contribution Act

Employees match contributions of employers to SS

progressive income tax
Progressive Income tax
  • Your tax bracket is the rate you pay on the taxable income that you earn
  • The U.S. uses a progressive tax rate. As a result, as the amount of money you earn increases so does the rate at which you are taxed. Tax Brackets
  • For example, if you earned $10,000 during the year,, then $8,700 would be taxed at 10% and the remaining $1,300 would be taxed at 15%. This works out to be a total of $1,065, which is less than it would be if the $10,000 was taxed at a flat rate of 15%, which would yield a total of $1,500 in income taxes.
  • http://www.forbes.com/sites/kellyphillipserb/2013/10/31/irs-announces-2014-tax-brackets-standard-deduction-amounts-and-more/
w 4 form withholding allowance certificate
W-4 Form Withholding Allowance Certificate
  • Purpose:
    • So your employer can withhold the correct federal income tax from your pay
net pay
NET PAY
  • When all deductions are taken out of your gross pay, the amount left is your net pay.
  • Net pay is the amount of money you can actually spend.
  • Net pay is often called “take-home pay” because it is the amount you can actually use as you wish
  • Regular wages or salary + Overtime= Gross Pay
  • Gross Pay - Deductions = Net Pay
federal w 2 wage tax statement
Federal W-2 Wage & Tax Statement
  • Employees receive at beginning of year (January-February)
  • Itemizes money earned & withheld by IRS
  • Based on previous year income
  • Employee can determine if paid too much/ too little to IRS
    • Tax refund- too much
    • Taxes owed- too little
slide20
IRS
  • Internal Revenue Service
  • Responsible for collecting taxes
when how to file your tax return
When & how to file your tax return
  • Single tax payers who earn less than $8,500 do not have to file a tax return
  • Gather your W-2 and any other documents you need
  • Complete a 1040EZ if you are single or married with no dependents and have income less than $50,00
  • Go to irs.gov for more info & forms
  • April 15 is the deadline to file!
2 nd part of budgeting expenses
2nd part of Budgeting: Expenses!
  • Money spent to satisfy needs/wants
  • Working Budget: Expenses & income balance
  • Expenses should not exceed income
  • Limited resources- choices on how to spend money
  • Opportunity costs vs. delayed gratification
expenses included in budget
Expenses included in Budget

FIXED EXPENSES

VARIABLE EXPENSES

Examples: Gas,

Food, Entertainment costs, clothing

Can change month to month

  • Savings- PYF (Leftover approach never works)
  • Example: Car payment
  • Insurance
  • Same amount of payment each time
how to build a budget
How to Build a Budget
  • Decide on a time frame for tracking expenses (week, two weeks, month).
  • List all money you have coming in (income).
  • Make categories for all expenses.
  • Subtract total expenses from income.
  • Study your budget and your financial plan to make sure it fits with your plans and goals.
ad