MONEY MANAGEMENT -BUDGETS
CREATING A PERSONAL BUDGET IS AN
ONGOING, LIFELONG SKILL FOR
PERSONAL AND CAREER PURPOSES…
 After completing this unit, you should be able to:
 Analyze & prepare a personal budget…
 Evaluate why and how debt occurs…
 Prepare & analyze personal short & long term goals…
 Determine ways to increase personal income & avoid
debt…
 DON’T LET THIS HAPPEN TO YOU!!!
 Theo doesn’t want to go to college – he wants to be “regular people”
 http://www.youtube.com/watch?v=Td_rWR5CpBA
PERSONAL FINANCIAL GOALS
 Financial Plan: set of goals for acquiring, saving & spending
money…
 Financial Goals:
 Measurable objectives related to acquiring or spending money…
 Can be short- or long-term…
 SMART Goals:
 Specific
 Measurable
 Attainable
 Relevant
 Timely
 ht tp://www.youtube.com/watch?v=d2Tdxekvy7c&feature=related
 ht tp://www.youtube.com/watch?v=3y0Jj a52B2o
 ht tp://www.youtube.com/watch?v=YmOS3dj 9h0s&feature=related
 How will you catch your dreams???
NEEDS / WANTS
Needs
 “must have’s”…
 survival…
Wants
 desires…
 not necessary for
survival…
http://www.youtube.com/watch?v=eVajZKcZBiU
VALUES
Values (beliefs)
• Different for everyone…
• Family, friends, experiences…
• Affect how you think about money…
Consider your values, then prioritize your needs &
wants to direct your financial future…
BUILDING WEALTH
Just because someone earns a million dollar salary
doesn’t mean they are a millionaire!!!
 What is wealth???
 A plentiful supply of money or valuable goods…
 Assets: things you own… monetary value…
 Liabilities: debts you owe…
Net Worth = Assets – Liabilities
http://www.celebritynetworth.com/
 Disposable Income: (net pay/income) “take home”
money used to pay expenses…
 Discretionary Income: what is left after all expenses
are paid…
NET WORTH EXAMPLES
 Oprah Winfrey
 h t t p : / / w w w. c e l e b r i t y n e t w o r t h . c o m / r i c h e s t - c e l e b r i t i e s / a c t o r s / o p r a h - n e t - w o r t h /
 Michael Jordan

h t t p : / / w w w. c e l e b r i t y n e t w o r t h . c o m / r i c h e s t - a t h l e t e s / n b a / m i c h a e l - j o r d a n - n e t - w o r t h /
 Mark Zuckerberg

http://www.celebritynetworth.com/richest -businessmen/ceos/mark-zuckerberg-net-worth/
 Donald Trump

http://www.celebritynetworth.com/richest -businessmen/richest-billionaires/donald-trump-net-worth/
 Bill Gates

http://www.celebritynetworth.com/richest -businessmen/richest-billionaires/bill-gates-net-worth/
 LeBron James
 http://www.celebritynetwor th.com/ric hest -athletes/nba/lebron -james-net-wor th/
SAMPLES PAY CHECKS AND PAYSTUBS
8
WHO IS FICA AND WHAT IS IT FOR?
 FICA (Federal Insurance Contributions Act)
 Which represents the tax that pays for retirees,
people with disabilities, and children of deceased
workers
 The employer pays the same percentage into
Social Security and Medicare
 If self-employed, one is responsible to paying two
times the Social Security and Medicare
9
10 MAJOR PAYROLL DEDUCTIONS
 Some have fixed amounts while other change
depending on type or work or location
1. Federal Income Tax: 10.00%-39.00%
2. State Tax: 1.40%-8.97%
3. Local Tax: 1.00%-4.00%
4. Social Security/ Medicare (FICA):5.65%
5. Unemployment: <1.00%
6. Emergency Services: $10.00-$20.00
7. Health Insurance : variable by employer
8. Union or Association Dues: variable
9. Pension Contribution: variable
10. 401(k), 403(b), 457, etc. (voluntary): variable
10
CATEGORIZING EXPENSES
Where does your money go???
As teenagers, your expenses are limited…
Fixed Expenses
Stay the same each
month…
Variable Expenses
Change from month
to month…
WHAT IS A BUDGET?
 Useful tool to track your money and spend wisely…
 Created for a specific time period (usually 1 month)…
 You will need to know:
 the amounts of income for the period & total…
 the fixed & variable expenses & total…
 Subtract the total expenses from the total income
(discretionary income)…
 If discretionary income is negative, reduce
expenses…
BENEFITS TO CREATING A BUDGET
 Personal Benefits???
 Business Benefits???
 Getting Your Teen on a Budget:
 http://www.youtube.com/watch?v=YNHbIoL2p-Q
WHY DO WE NEED TO BUDGET???
ASK BILL COSBY…
 http://www.youtube.com/watch?v=_ svOvuaecxs
http://www.youtube.com/watch?v=_sv
Ovuaecxs