Budgeting Matters
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Transcript of Budgeting Matters
Budgeting MattersBudgeting Matters
Why Budget?Why Budget?
• See where your money comes from
• See where your money is going
• Plan for long term goals
• Save for unexpected emergencies
• Have more spending money!
Needs versus WantsNeeds versus Wants
• How do you feel about money?
• Are you spending more than you have?
• Is what you’re buying a need or a want?
“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.”
-Benjamin Franklin
How much do Americans save?How much do Americans save?
How much do YOU save?How much do YOU save?
What’s an emergency fund?What’s an emergency fund?
•Money saved for unexpected emergencies
•Ideally, the amount should be 6-12 months of expenses
Budgeting ExpensesBudgeting Expenses
• What expenses are included in a monthly budget?
“I have enough money to last me the rest of my life. . .unless I buy something.”
– Jackie Mason, comedian
TRUE TRUE OROR FALSE? FALSE?
Only 14 out of 50 states in the U.S. require students to take a financial course to graduate.
TRUETRUE
Most high schools offer personal finance as an elective course.
How much do you cost???How much do you cost???
• It costs $270,000 to It costs $270,000 to raise a child in the raise a child in the United States to age 17.United States to age 17.
TRUE TRUE OROR FALSE? FALSE?
54% of American homes are paid for.
FALSE-only 2%
What are your short term and What are your short term and long term goals?long term goals?
SHORT-TERM GOALS
Buy a cell phone
Save for vacation
Buy new clothing
iPod
LONG-TERM GOALS
Purchase a car
Save $10 each week
Pay for college
What Can You Do NOW?What Can You Do NOW?
Be a smart spender
• Shop around for the best deals• Don’t buy on impulse• Use coupons or wait for sales• Use the good student discount• Substitute – choose off brands• Negotiate on large items• Talk to others who have experience
Debit vs. Credit CardsDebit vs. Credit Cards
What’s the difference?
• Debit cards deduct money from your bank account
• Credit cards loan you money which you have to pay back. After 30 days, interest accrues.
TRUE TRUE OROR FALSE? FALSE?
It is always bad to use credit cards.
FALSE
Credit CardsCredit Cards
• How do I choose a credit card?How do I choose a credit card?– Low interest rate
– No annual fee
– No start up fee
– Incentive programs• www.bankrate.org helps you choose a card that www.bankrate.org helps you choose a card that
is right for youis right for you..
Credit CardsCredit Cards
• How can you use credit cards wisely?How can you use credit cards wisely?– Pay entire amount off each month
• This builds your credit score
– Use for emergencies• Car repairs• Ambulance ride or hospital stay
Let’s reviewLet’s review
• WHAT to spend?– Budgeting allows you to decide how much
money can be spent on what items.
• WHY to spend?– Determining needs versus wants helps decide
why you are buying an item.
• HOW to spend?– Deciding if you can pay for an item now or if
you need to put it on credit.
Helpful Web SitesHelpful Web Sites
• www.fool.com/teens discussion boards and detailed information
• www.moneyopolis.org interactive game simulations
• www.creditunionsrock.org wide range of content
• www.themint.org mock situations of budgeting, saving, investing, etc.
Thank You!Thank You!
Curriculum Development Committee:John Comer, Comer ConsultingD.J. Enga, Auriton SolutionsShawn Jacobson, Legacy Financial AdvisorsBob Kaitz, BestPrepRachael Kelly, Asti Consulting GroupAngela Laubmeier, BestPrepJennifer Ruhland, Family MeansJanet Stanzak, Financial EmpowermentBonnie Vagasky, BestPrepSuzy Wheeler, Family Means ©2007 BestPrep
BestPrep gratefully acknowledges the Foundation for Financial Planning for providing financial support to fund this project. We also are indebted to the Financial Planning Association of Minnesota for their help in creating and piloting this presentation.