Unit Two. Budget: Don’t Go Broke!. What is a Budget?. Budget – a plan for managing money during a given period of time. A roadmap to reaching your goals. Also called – Spending/Savings Plan Must be flexible – can be adjusted Requires self-discipline – spending must not exceed income.
Don’t Go Broke!
Budget – a plan for managing money during a given period of time.
1. Income 2. Expenses
Income – any money coming in
Examples: job, allowance, interest, gifts
Expenses– money you spend on your needs and wants, money going out
Examples: car payment, rent, school fees, etc.
Employers match contributions:
SS 6.2% (12.4%) Medicare 1.45% (2.9%)
-- Examples: rent, car payment, car insurance, cable, etc.
Trick is to balance Income with Expenses
Sample budget – page 22
PYF – pay yourself first
Don’t give yourself a choice
A bill you owe yourself
Another simple tool you can use to choose between alternatives
Weigh the cost of a product or service against the benefit it will provide.