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BUDGETING

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by

Scott Mills

on 27 February 2015

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Transcript of BUDGETING


Ways to improve your score:
Pay bills on time. Keep low
balances on credit cards. Stay on top of your credit score & report!
WHAT IS BUDGETING?
Budgeting is a process used to develop:
An outline of income and expenditures.
A guide for spending and saving.
An organizational plan that begins with monitoring personal expenses.

Medical Expenses
- Purchase medications / vitamins in bulk.

- Look for family dental discounts.

- Look for free clinics or screenings.

- Shop around for best offers.

- Watch for eye care specials.
Make it Simple
BENEFITS OF BUDGETING..
Develop a spending plan:
- Determines where your money goes.
- Defines your financial goals.
- Helps you live within your means.
- Clarifies your

Wants

vs. your

Needs.
GOAL SETTING
Be disciplined and develop a clear path for your money.
Short Term Goal: (0-6 months)
-
Save for new appliances.
PREPARING A BUDGET
FIRST: INCOME

Gross Pay is the total amount of money earned before any deductions.

Net pay is the actual amount of money received after deductions (take home pay).


Record your net pay in a 30 day period!
THIRD: NET INCOME
Net Pay
-

Expenses
Net Income
If the result is positive, start tracking, maintaining, and saving.
If the result is negative, start identifying areas to cut costs.
EXAMPLE BUDGET
KEY ISSUES
Expenses > than income.
Multiple Credit Cards being paid.
No savings.
No emergency fund.




Must re-evaluate & identify ways to improve the budget.
Avoid impulse buys.
CUTTING
EXPENSES
Shopping List
Create weekly menu
Look for the lowest prices
Buy items in bulk
Coupons!
Cable, Phone, & Internet
Shop around, companies will compete for your business.
Re-evaluate bill & look for monthly or yearly deals.
Bundle you internet & cable together.
Evaluate costs between land line vs. cell phone.
Negotiate!
Utilities
You control the Meter!
Unplug some appliances when not in use
- Phone chargers, lamps, kitchen appliances.
Set winter temperatures 68 to 70 degrees.

Set summer temperatures 80 to 82 degrees.

Turn down / flush your water heater.

Change furnace filter.

Shrink wrap windows.
Insurance Prices
Insurance deductibles...the higher your deductible, the lower your premiums could be.
By lowering your deductible...the less out-of-pocket costs when making a claim. But you'll pay more in regular policy premiums yearly.
OLD vs. NEW Budget
OLD vs. NEW
Old Budget = Overspending
$508
monthly and
$6,096
yearly.
New Budget = Saving
$172
monthly and
$2,064
yearly.
More Tips for Tracking..
- Keep an eye on your expenses.
- Be comfortable with your budget.
Never be confused about your finances.
Let's keep the ball rolling!
Now you have...
Defined your personal financial goals.
Understood your net income.
Chosen your financial method going forward.
Adopted a positive and disciplined approach.
You are ready to maintain your budget!
Avoid junk food (not healthy, costly).
OFFICE OF ILLINOIS COMPTROLLER
LESLIE GEISSLER MUNGER
Spending Habits..
ATM Fees
Traffic & Parking Tickets
Unused Gym Membership
Credit Card Interest
Infomercials
Five Ways to Impact your Budget
Financial Health
Money Management Habits
Financial Goals
Future Jobs & Pay
Health & Happiness
Lifestyle
Financial Planning Process
Analyze your values, money management, & financial situation.
Plan for the unexpected events.
Carry out your plan and track your progress!
Monitor and adjust your plan as your situation changes.
SMART
Goal Setting
S
pecific
M
easurable
A
ttainable
R
elevant
T
ime Line
S
pecific -
What needs to be accomplished?
Why do I want to accomplish this goal?
M
easurable -
How much change needs to occur?
How many accomplishments or actions will it take?
A
ttainable -
Do I have, can I get the resources needed to achieve the goal?
Will the actions I plan to take, equal success?
R
elevant -
Is this a worthwhile goal for me right now?
Am I willing to commit to achieving this goal?
T
ime Line -
What is the deadline for reaching the goal?
When do I need to begin?
Set
SMART
Financial Goals.
Designer Labels / Clothes
Important to keep an eye on your Credit / Credit Score!!
Helpful...
-Employment.
-Better insurance rates.
-Getting a new automobile.
-Obtaining a home & apartment.
-Lower interest rates on loans.
Hurtful...
-Insurance companies
may refuse you.
-Pay higher interest for loans.
-Employers may look at score.
Credit Score Ranges
Control your own Meter!!
Calculating Your Budget..
Savings
Put towards short, medium, & long term goals.
Open a Certificate of Deposit (CD).
Invest in stocks, bonds, or commodities.
Add contributions to your 401k.
Pay down credit card debt.
Pay down debt!
Budgeting Expenses...
When it comes to Insurance...
Bundle different policies.
Comparison shop, do your research.
Make sure your paying for the coverage you need!!
Welcome
Budget Overview
Prepare a Monthly Budget
Cut Expenses
Credit / Credit Scores
Maintain your Budget
www.illinoiscomptroller.com
1-855-IL-ASK-US
Balance your checkbook use online banking.
Watch miscellaneous spending.
Look for price matching policies.
- Shop around / shop for online deals.

Categorize your money accordingly:
- Savings, emergency, unexpected.

Long Term Goal: (up to 5 years)
- Save for retirement.
Medium Term Goal: (6-12 months)
- Save for a different automobile.
For 30 Days: List Fixed Expenses and Estimate Variable Expenses
2 Earners = $60,073
1 Earner = $46,355
AVERAGE MEDIAN HOUSEHOLD INCOME IN ILLINOIS
Consider budget billing
Shutdown computer at night
Turn off lights when not in room
Seal off unused rooms
Reverse ceiling fans (summer counter-clockwise)
330
850
726
830
629
699
330
550
Full transcript