Budget for Financial Goals

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Budget for Financial Goals

• Section 3.3

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Preparing a Practical Budget

• Budget
• Is a plan for using money to meet wants and
  needs.
• 7 steps for making a practical budget
• Set your financial goals
• Depends on your lifestyle, values and your hopes
  for the future.
• Set specific goals
• Set a time frame to reach these goals
• Separate into short, intermediate, and long term.

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Step 2

• Estimate your Income
• Very easy to do in some cases. Difficult in
  others.
• You need to estimate as well as you can either by
  using a cash flow statement or balance sheet as a
  guide.

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Step 3

• Budget for Unexpected Expense
• There is expenses the pop up unexpectedly.
• Car breaks down, Flood, Hospital Bills
• Cant set all of your money aside for just one
  thing. Need to make sure that there is some
  money that is set aside to help out unexpected
  things.

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Step 4

• Budget for Fixed Expenses.
• You should figure in each month there are
  expenses that we will have to pay.
• Rent
• Electric
• Cable

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Step 5

• Budget for Variable Expenses
• We know that things like
• Gas Prices, increase in utilities, and such.
• Consumer Price Index is a measure of the changes
  tin prieces for commonly purchased goods and
  services in the US.
• You can compare what you spend to the national
  average to help you set your budget.

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Step 6

• Record what you spend
• Write down what you budgeted for each expense.
• Then write down what you actually spend.
• Then the budget variance is the clue as to what
  is going on in your budget

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Step 7

• Review Spending and Saving Patterns
• If you cant afforrd the bills or you have to
  much money left over at the end of the month you
  can look at your budget to help you decided what
  is wrong or right with your budget.
• Here is an example of what your budget should
  look like.

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