Budgeting CALM 20 Budgeting • Failing to financially plan? Planning to financially fail? • What is the worst financial decision that you have made in your life? • What important financial decisions and purchases will you have to make in the next five years? • Are these wants or needs? Budgeting • What things do you need to consider in order to achieve these financial goals? • What job will I have? • How much can I afford to save or pay each month? • Do I need a loan? Can or should I get a loan? • Do I have a co-signer? • Where will I live? • Can I afford to go to school? • Should I start and RRSP or RESP? • How much support will be available from my parents/guardians? Budgeting • How can we be sure that our income will cover our expenses? (think/pair/share) • Have a plan • Keep track of expenses • Create a budget • Look closely at areas where cuts can be made in expenses • Use a calendar to schedule bill payments/pay cheques • Use a list for items to buy and stick to it! • Shop when there are good sales • Consider needs versus wants • Reduce entertainment costs • Pay in cash Budgeting • The most important thing that you can do to achieve your financial goals is to have a plan for your money...this is called a BUDGET • Budget-A plan for spending and saving your money. It will help you make your money work for you. Budgeting Tips • Keep track of everything that you spend for three months to set a realistic budget • Pay yourself first. Save 10% of your income. • Housing should not exceed 35% of your net income (rent/mortgage 25% utilities 10%) • Carefully plan your spending to live on what you earn (net income minus expenses/savings) • Before spending, always ask yourself, is this a want or a need? Your values will influence your spending. • Avoid going into debt. Budgeting • Rework a Budget Assignment – First take the information provided to you to set up Rachael’s budget. – Next rework Rachael’s budget to fit your personal lifestyle. • Submit the completed budget’s by the end of class time.