Making a Budget 7th & 9th Grade FACS How much money do you spend each week? Some Money Facts • The average person spends money three times a day. Some Money Facts • A movie with popcorn and a soft drink can easily cost $20.00. Some Money Facts • Just one soft drink a day for $0.99 adds up to $361.35 in a year. Some Money Facts • How much is the average amount a teenager spends in one week? • $104/ week • Teenage Research Unlimited, 2001 Budget Definitions • Consumer – Anyone who buys items or pays someone to do a service. Budget Definitions • Budget – A spending plan or a guide to help you direct where your money goes. Budget Definitions • Income – Money you receive. Budget Definitions • Fixed Expenses – Repeated set costs. – Insurance – Car payment – House payment • Flexible Expenses – Repeated variable costs. – Groceries – Clothing – Entertainment Budget Definitions • Savings – Money set aside for future use. • Credit – An agreement that allows you to buy an item now, and pay for it later. • Finance Charge – A fee for use of credit. Budget Definitions • Impulse Buying – Buying items you had not planned to buy. Budget Definitions • Gross Monthly Income – Total income before taxes or expenses. Your salary. • Example: $1,500 before taxes Budget Definitions • Net Monthly Income – Income after deductions. What you take home. What you actually see on your paycheck. • Example - $1,500 GMI becomes $1,100 NMI Budget Definitions • Payroll Deductions – Money that comes out of every paycheck for medical insurance, dues (union), retirement plans, etc. Budget Definitions • Monthly Expenses – What you need to pay out each month in order to live your lifestyle. • Examples – rent, cable, phone, food, clothing, car payments, gasoline, car insurance, entertainment, etc. Budget Definitions • Balance – What is left after pay all of your expenses. • If nothing is left or you are in the “red”, you need to make cut-backs!!! Make a budget!!