How to Budget Ted Cooprider

◦ Cooprider Financial Partners in Williamsburg◦ Chartered Special Needs Consultant designation

◦ Created to better prepare financial services professionals to help families with special needs to plan for their children’s future proactively

◦ tcooprider@financialguide.com ◦ www.coopriderfinancial.com◦ (757)206-1627

Introduction

What is a budget? A budget is a plan for saving and spending money. It shows how much you have coming in (income), how much is going out (expenses), and how you might save money

Budgeting…◦ Shows you how much money you have◦ Helps you make decisions about the money you spend◦ Helps you save money and plan for the future◦ Simplifies and increases financial independence

Step 1: Think About What is Important for You

What do you want to be able to do with your money?◦ What do you want to work toward?

◦ Examples:◦ Having enough money to pay your own bills◦ Paying all of your bills on time◦ Saving money◦ Giving money to charity◦ Taking a vacation◦ Getting a better apartment or buying a house

Activity 1: List What is Important for you

Write down specific things or activities you would like to use your money for

Step 2: Separate Needs from Wants Needs are things we require or must have in order to live Examples of needs: ◦Housing (rent)◦Medicine◦Food◦Water◦Clothing

Step 2: Separate Needs from Wants Wants are “extras” that make our lives more comfortable and enjoyable but are not necessary Examples of wants:◦Big screen TV◦Designer clothes◦Toys & Video games◦Eating out◦Going to the movies

Activity 2: List your Needs & WantsWrite down things you need in the first

column and things you want in the second column

Step 3: List All Income Income is the money that comes into your household This money can come from:◦Paycheck◦Supplemental Security Income (SSI)◦Social Security Disability Insurance (SSDI)◦Money you take out of savings◦Money from family members and friends (if regular)

Step 3: List All IncomeExample: Susie works part-time and earns $250 each month from her job. She also receives a Social Security check each month for $500. In addition, her parents give her $50 to help with groceries. When you add these up, her total income is $800 per month.

Where my money comes from Amount Per Month

Paycheck $250Social Security $500Financial help from parents and friends

$50

Total Income $800

Activity 3: List All IncomeWrite down all of the money you earn

or receive each month in the table.Add up all the numbers to get your total income.

Step 4: List All Expenses

Rent Haircuts Water and Sewer Car payments, insurance, gas Electric/Natural Gas Insurance and Repairs Cable, phone, internet Credit Card Payments Medicine Food (including eating out) Clothes/shoes Pets Personal items Entertainment/fun

Expenses are the money you spend each month. Expenses could include:

Activity 4: List ExpensesWrite down all of the money you

spend each month in the table below. Some of these will be the same each month

but others may change. Add up all the numbers to get your total

expenses.

Step 5: Match Income and Expenses Now it is time to see how you well you are doing with your money. Do you have money left over each month? Are you spending more money than you earn each month? If you have money left over – great job! If you came up short, you can look for ways you could increase your income or decrease your expenses – or both.

Activity 5: Match Income and Expenses

Write in your total monthly income and your total monthly expenses. Subtract your expenses from your income and write down the total in

the last box. This number will be positive if you have money left over and will be negative if you are spending more than you earn each month.

Step 6: Look for Ways to Save Money

Adjust thermostat when leaving the house or sleeping

Make a shopping list and buy only the items on the list

Shop at discount stores

Buy generic items instead of name-brand

Use coupons and look for sales

Look for free community events (festivals, concerts, movies)

Borrow free books and movies from the library

Apply for a free government cell phone

Buy only what you need instead of what you want

Cook and eat most of your meals at home

Avoid borrowing money from family and friends

Use cash instead of credit cards

Get other quotes for car insurance

Activity 6: List Ways You Might Be Able to Save Money

Write down some specific ways you might be able to save money, for example using

coupons for groceries or turning off the lights when you leave a room

Step 7: Make a Budget A budget is a plan for saving and spending your money. The totals for income and expenses must match or your expenses must be less than your income!

Planned Income

Paycheck $250

SSI $500

Family $50

TOTAL $800

Planned Expenses1. Rent $400 2. Electricity $80 3. Phone/internet $50 4. Cable $50 5. Groceries $150 6. Bus tickets $25 7. Eating out $25 8. Savings $20

TOTAL $800

Activity 7: Make a BudgetStart with writing down your income. Then write down all of the things you plan to spend your money on.The total of your expenses and your income should match or your expenses must be less than your income!

Step 8: Keep Track of Your MoneyIt is important to keep track of your money each month so you can budget correctly. You will need to write down: •Date •Item •Expenses •Amount paid/received •Income

Use a plastic bag or envelope to keep receipts in.

Step 8: Keep Track of Your Money

Date Item Amount 7/1/2013 SSI check +$500 7/3/2013 Rent -$400 7/10/13 Fast food -$4.65 7/12/13 Movie ticket -$8.50 7/15/13 Paycheck +$125.00 7/15/13 Groceries -$32.47

EXAMPLE: Susie has started to keep track of her income and expenses. Each time she spends or receives money she writes it down and puts the receipt in a plastic bag or envelope. Use a plus sign (+) for income and a minus sign (-) for expenses.

Activity 8: Keep Track of Your MoneyEach time you spend or receive money, write it down on the worksheet on page 19. Use a plus sign (+) for income and a minus sign (-) for expenses. Save all of your receipts in a plastic bag or envelope.

Step 9: Review Your Budget Each week, or month, review all the worksheets to see what is working and what is not. You may want to ask a trusted family member, friend, or staff person to help you with this.◦ Did you remember to write down all the money you are

spending?◦ Are you saving all of your receipts?◦ Are you following your budget?◦ Do you need to make changes?◦ Are you getting close to your budget goals?

Step 9: Review Your Budget

Start Again!

Make a budget(page 15)

Write down all the money you receive on the tracking form (page 17)

Write down all themoney you spend onthe tracking form(page 17) & saveyour receipts

Compare your trackingsheet with your budget (page 15)

Make any neededchanges to yourbudget on(page 15)

Step 10: Take the “Yes” or “No” Quiz

Questions Yes No1. Do you know what the word ‘budget’ means?

2. Do you know where your money comes from?

3. Do you know how to create a budget?

4. Do you know what you have spent your money on by the end of the month?

5. Do you know who to ask for help with your budget?

Resources for Financial Assistance

Department of Social Services

Food stamps; Women, Infants, and Children (WIC); Low-income Energy Assistance Program; Crisis Intervention Program

Community resources like food banks, community action agencies and faith-based programs

The United Way (for local resource information)

Utility companies for possible payment plans

Prescription assistance programs

VITA tax preparation sites for free help filing taxes and collecting tax refunds

Resources for Financial Assistance

Make sure that you receive the most for your money by checking your credit report to make sure that it does not have wrong information about your credit history.

To order a free credit report:

Call: (877) 322-8228 Log on to: www.annualcreditreport.com

Write: Annual Credit Report Request Service PO Box 105281

Atlanta, GA 30348-5281

References National Endowment for Financial Education & The Arc of The United States (2001). Make the Most of Your Money! Denver, CO: National Endowment for Financial Education.

Stouffer, Tere (2008). Everything Personal Finance in your 20s & 30s (2nd ed.). Avon, MA: Adams Media.

Stouffer, Tere (2008). The Everything Budgeting Book (2nd ed.). Avon, MA: Adams Media.