Benefits of
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Unit 2 Budgeting Review for Test on Friday, Oct. 23
Tracking spending habits (pg. 16)
Knowing where you money is actually going
Knowing how much money you have to create a budget
See if we can achieve SMART goals.
Help save for the future planning/budgeting
Allows you to make wise money decisions
Advantages of creating/following a spending plan (budget) (pp 16, 25)
o Prioritizing our spending & saving
o Keep us from going into debt
o Having money for our needs/wants
o PYF: allows us to put money away to save for our goals
Financial Documents everyone should keep on file (pg 23-24)
o Tax documents
o Loan/credit statements
o Checking account statements/reconciliations
o Receipts & warranties
o Pay stubs
o Insurance documents
PYF: Pay yourself First
o Saving for future goals
o Calculate as a fixed expense.
o All cash surplus has to go somewhere - might as well be to ourselves
How to track your budget (p 24) (strategies)
o Envelope system
o Tally system
o Checking Account Register
o Spreadsheet (Excel)
o Personal Finance Software
Income: money you receive (paycheck, allowances, gifts, interest earned from
investments/accounts)
Expenses: what we spend our money on
o Fixed - same amount due every month
o Periodic - not due every month but is paid various throughout year (6mo,
1xyear, every other month)
o Variable - they fluctuate in amount each month. (guess/estimate how much
to spend/budget for)
Purpose of W-2
o Tells you how much money you made throughout the year
o Comes from your employer
o Must have before Jan 31.
Unit 2 Budgeting Review for Test on Friday, Oct. 23
**Complete a paystub (fill out)
Calculate Gross Pay, Net Pay, deductions (pg. 18)
o Hours * rate = GP
o Deductions include: fed'l tax, state tax, FICA (SS, Medicare), if own
business - self-employment tax, child support, advance (loan repayment),
fees, retirement fund, insurance
 SS = .062*GP
 Med. = .0145*GP
o GP - Deductions = NP
Net Pay = what is used for? Spending money for BUDGET
Purpose of W-4
o Determines how much comes out of your paycheck
o Based upon the number of deductions. (usually 0 or 1)
Purpose of PayStubs
o Provides information on how much you've earned for the year - and pay
period
o Shows all your deductions - as well as for year-to-date
o Employer's information
o Current rate
o # hours worked
o Net pay
 **calculate for goals
Fixed Expense
Gross Income (same as gross pay)
PYF
Payroll Deductions
Net Income
Spending & Saving Plan = budget
o Tracks our cash flow - monitor our money
Variable Expenses
Organization of personal budget
***you have been keeping track of all the money you spend and all the money
you earn.
**** You are going to have to create your own personal budget based upon your
information
Budget relation to Goals (at beginning)
Revisions =
Will be given a sample budget = you'll have to put together.
Will also have to REVISE the budget according to situations. (**STUDY - all the
practice budgets we've done in class)