Calendar Based Budgeting

Report
Calendar-Based
Spending & Saving Plans
Florida Saves 2020
“See Your Future Clearly”
Anita McKinney, Duval County
Extension Educator
1010 N McDuff Ave
Jacksonville, FL 32254
904-387-8850
[email protected]
Manage
Risk
Needs &
Wants
Know
Resources
Good
Financial
Health
Manage
Cash &
Credit
Save
Economic
Environment
What you will learn today:
• Importance of managing money
– Reach goals
– Helps build wealth, manage risk
– Relieve stress
• Cash Management
– Build a spending plan
– Track expenses
– Follow your plan
• Spending
– Gaps, leaks and habits
Why plan your
spending and
saving?
• Helps to see if you have extra cash or not
enough each month
• Helps reduce stress
• Helps you see if money comes in and goes out
at the right times
• Helps you prepare for occasional or seasonal
expenses
The Planning Cycle
Set
Goals
Change the
Plan
Work the
Plan
Gather
Information
Write a
Plan
Financial Planning
Steps
1.
2.
3.
4.
5.
6.
Write SMART goals
Identify income amount for the month
Find all bills and due dates
Track expenses for a month
Write plan in money calendar
Stay on track with the UF Money Management
Calendar
7. Plan time to review and make changes for next
month
Set SMART Goals
It’s a big world out there
and it’s hard to get to
where you are going
without a roadmap.
The shortest distance between two points…
depends on where that second point is…
SMART Goals
Write your goals in the
piggy bank of the UF
Money Management
Calendar
Goal
$
Amount
Start
Saving
Buy
Date
No.
Months
$ per
Month
TV
$600
6/1/11
11/1/11
6
$100
Rainy
day
fund
It’s YOUR choice!
• Spend and enjoy today
• Save and enjoy tomorrow
• Don’t forget to have enough set aside for an
emergency!
– 1 to 3 months of major expenses
– Do it automatically from paycheck to an account of
your choice
– Take Fresh Start and open an account
Identify Your Income
• Show Me The Money!
– Salary or wages, cash assistance, benefits
– Assets you can sell if money is needed for
debts or emergencies
• What if you don’t know how much it will be?
– Plan with what you know!
– If it varies, use the average or lowest amount
Write monthly income on page 9
Track Your Current Behavior
• List monthly bills and amounts
• Keep track of your expenses for one
month to see where your money goes
Track Your Current Behavior
• Spending Diary
– Keep a folded sheet of paper with you
• Keep all receipts
• Decide the category of each expense
• Write amounts in the UF Money Management
Calendar tables each day
Sun.
Mon.
Tues.
Wed.
Thurs.
Fri.
Sat.
Shopping
list
Get Organized With Your
Expenses
• Fixed
• Flexible
• Occasional
Write it down – better than just thinking it.
Get in the habit!
Write the Plan on Page 9
• Fixed expenses
– Rent or mortgage
– Utilities
– Debt payments
• Flexible expenses
– Food
– Personal care
– Clothes
• Add the amount you intend to save for your
goals and rainy day fund
• Identify yearly totals of occasional expenses
– Divide by 12 to get the monthly amount to save each
month
Organize Your Calendar
•
•
•
•
•
Write fixed expenses
Add utility due dates
Add paydays
Add other flexible expenses, if dated
Amounts and “pay dates”
Sun
1
Mon
2
Tue
3
Wed
4
9
10
Utilities Due
15
16
17
Phone Due
22
Ballgame
23
24
Fri
Sat
5
6
7
Pay Utilities
Paid! $750
Groceries
11
12
13
14
Cable Due
Pay Phone
18
19
20
21
Pay Car
Car Due
Paid! $750
Groceries
25
26
27
28
haircut
Groceries
Rent $500
8
Thu
Groceries
Use the Monthly Calendars
• Bills
– Place bills in the calendar booklet for safekeeping
– Depending on method of payment, plan to pay bill at least 2-3
days in advance
– More time may be needed if bill is due on a weekend or Monday
• Match up
– Timing of income
– Timing of expenses
• Do you have a cash flow problem?
– Ask to change due dates
– Save money from previous income
Stick With Your Plan
• Spending Diary
– Keep a folded sheet of paper with you
• Keep all receipts
• Write amounts in the UF Money Management
Calendar tables each day
Sun.
Mon.
Tues.
Wed.
Thurs.
Fri.
Sat.
Shopping
list
Review and Revise
• Add up amounts in flexible expense columns
– Did you go over?
– Did you spend less that you budgeted?
• Add up fixed expenses
• Add fixed and flexible amounts together
• Subtract total expenses from income
• Did you stay within your plan?
• Did you save the amount you need for
occasional expenses?
Increase Income/Resources
•
•
•
•
Second job
Ask for a raise
Find a better job
Family member gets a job
• Learn to “do it yourself”
• Barter or trade services
Increase Income
• Get new licenses/degrees/certifications
– This may require spending money to make money
• Personal exemption withholding from paychecks
• Tax deductions
– Child Tax Credit
– Earned Income Credit
– Dependent Care Credit
• Get taxes prepared free, amend previous tax
returns
Decrease Expenses
• Reduce or eliminate spending on “wants”
• Modify or reduce flexible expenses
– Carpool
– Limit eating out
– Grocery shopping
– Electric and water
• Can you change fixed expenses?
Check for Spending Leaks
• Do you compare prices?
• Do you use coupons? Use advertising to your
advantage?
• Do you think ahead about your needs?
• Do you take care of what you own and get full
life from purchases?
How much should we spend?
On average, Americans spend the following percentages of their
income in each category:
Food
13-15%
Housing
32-42%
Education/
Recreation
0-10%
Gifts/
Contributions
0-10%
2-10%
Child Care
15-25%
Clothing
3.8-4.2%
Personal
2-5%
Misc./
Emergency
Transportation
17-18%
Savings
0-10%
Medical
6-7%
Insurance
0-11%
Percentages
• Divide amount you spend by the
amount you take home
– $450 (rent) divided by $1200 (income)
equals .375
• Multiply answer by 100 to find per cent
– .375 multiplied by 100 = 37.5%
Is this per cent in the range for Housing?
How Little Expenses Add Up
Example
Coke
1/day
Vending Machine
Bought at Store
$1.00/day
$.42/day
$260/yr
$105/yr
Save $155/yr.
Long-term Cost of My Habit?
Invested
$155.00
Investment Yield 7%
5 years
Years
Total Invested = $775.00
Total Value = $954.00
Total Earned in 5 years = $179.00
In 30 years, you will have $7,262.00
Long-term Cost of Snacks
• $2.00 per day or $60.00 month
– (Invest $60 month at 7% for 30 years)
– How much are those daily snacks costing
you?
$157,489
Change Your Plan
• Set a Monthly Money Date!
• If you have left-over money,
pay on debts, save for next
month or future
• If you spent too much, what
will you cut back on next
month?
• Accuracy ensures results
Totals for the Year
• Enter total monthly amounts for fixed and
flexible categories on pages 34 and 35
• Were you over or under your budgeted
amounts?
• Calculate your average monthly amounts
for the year and use for next year’s plan
• Enter tax deductible expenses on the back
cover
• Call 904-387-8850 for a new calendar
Have No Fear…Help is Here to
Make Your Future Clear!
Florida
Saves
2020
“See Your Future
Clearly”
• Florida Master Money Mentors is the team
to trust with planning your financial future!
• Complete the surveys
• Complete the request form for
a mentor if you want one-onone help

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