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BUDGETING!!!!!

BUDGETING!!!!!. $25,000 a year…a lot of $$$???. 1. what is a budget? 2. do any of you have a WRITTEN budget? 3. Why are budgets important to have?. AFTER WATCHING COSBY CLIP. 1. Why are Theo’s parents worried about his grades? 2. What does DR. Huxtable know that his son does not know?

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BUDGETING!!!!!

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  1. BUDGETING!!!!!

  2. $25,000 a year…a lot of $$$??? • 1. what is a budget? • 2. do any of you have a WRITTEN budget? • 3. Why are budgets important to have?

  3. AFTER WATCHING COSBY CLIP • 1. Why are Theo’s parents worried about his grades? • 2. What does DR. Huxtable know that his son does not know? • How much money does the “regular” person in this video clip make? • What would this be as an annul salary? (1985) ($25,000 in 2013) • On what and how much did Theo say he would spend his “regular” person’s salary? • How much money was left over after all the bills were paid? • How realistic was Theo being in the clip? • How many of you would be willing to live on “bologna and cereal”? • How many of you occasionally eat fast food meals? How much does a meal cost? How much would a month of those meals cost? • Do you think Theo’s “Regular” person can live a rewarding lifestyle on this budget? Why/why not?

  4. Why We Need Money Management Skills • 1.) To provide for and protect yourself and your family. • 2.) To plan for the future. • 3.) To reach your goals.

  5. Goal Setting Survey of Harvard Graduates A study was done of Harvard alumni 10 years after they had graduated. The survey found that: • 83% had NO specific personal or business goals. • 14% had specific goals but they were NOT written down. • 3% had specific goals that were written down.

  6. PAYOFF: • Those with goals not written down earned 3 times as much as those with no goals. • Those who had written their goals down earned • 10 times as much as those with no goals.

  7. No Goals Ignorance Debt Poor investments Inflation Taxes Procrastination – the most common! Roadblocks to financial success

  8. Set GoalsWhat do you want out of life? • 1.) Short Term Goals (1-2 years) Emergency fund • 2.) Medium Term Goals (5 years or less) Buy a home • 3.) Long Term Goals ( 5 years and longer) Children’s Education Retirement

  9. Building Your Budget • 1.) Decide what you want to do with your money. • 2.) Make Your Plan and stick with it!

  10. Think-pair-share-write… • What do I want out of life… • 1. In 8-10 years, what goals will I want to have accomplished and how do I want to be living? • 2. What will I have to do to accomplish these goals? • 3. What roadblocks can I see possibly having to gaining these goals? • How might I overcome these roadblocks? • How can a budget / money management help me accomplish this?

  11. Lets look at you spending trackers… • 1. Can you categorize you purchases in any meaningful way… • 2. What were the total EXPENDITURES in each of these categories? What categories did you spend the most? / the least? • 3. What were your REVENUE sources? • 4. How many of these purchases gave you something permanent? (asset) How many are were used up immediately/ quickly? • Did everyone have the same answers in the class? Is that okay?

  12. How did you do financially? • 1. Did your actually spending habits fair well with you goals? • How can you better align your spending to what are priorities in your life? • Are there some spending that you could NOT avoid? • Are there some spending that you will try to avoid? • How?

  13. Lets model a simply budgetary plan… • Instead of thinking 8-10 years away, Lets fast forward your life to your senior year…(Prom, graduation, senior trip, driving, no more McAnulla’s class every other day..ahhhhhhh) • List everything you will need to spend money on in order to have a fabulous senior year…. • Activity at tables… 3.2.2..3.2.3..

  14. Reflection questions…on back of budget worksheet • 1. Where will the income (money) for these activities / expenses come from? • 2. How many think that they will be able to do all of these things with no cost to themselves? / Will you parents pay for everything? • 3. What will be some of the opportunities cost your parents will have to face because of your senior expenses? • 4. How could you increase your income? • 5. What strategies could you use to reduce your spending? • 6. How will a budget keep you on track for your goals?

  15. Congrats!!! (8-10 years later…) • You have just been hired for the fabulous career that you have been working for!!!!! • Your starting salary is……25,000 • -- $2084 a month • __ $480 a week… • Big money

  16. BUT… • Uncle Sam gets the first bite of your pay check… bwwahahahaha • Gross pay… Net Pay… Taxes • Deductions and Benefits • Required and optional deductions • Tax Tables… • The federal taxes:W2, 1040, 1040 EZ, • State/ local taxes… • Nicole’s and Jack’s tax situation…

  17. Question??? • Is it better to get a tax refund or have less taxes withheld? Support your answer!!!!

  18. A budget with NET • Now that you have a more accurate idea of how much money you actually get to take home…. • A monthly budget… John and Marcia’s stories… • ASSESSMENT: Now you have to do your own monthly budget!!!!

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