Budget Management
Counseling
What is a budget?
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Financial instrument used to plan and
monitor the receipt and use of income
Lists income and expenses for a particular
period of time
Primary purpose is to guide the allocation
of income so that it will meet expenses and
permit other uses, such as savings and
investing
Why do budgets fail?
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Not really wanted
Not agreed upon
Not realistic
Not well designed
Not well supported
10 most common budget problems
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Too little income
Too much debt
Too much spending
Too little discipline
Too many goals
Too naïve
Too little knowledge
Too little management
Too little communication
Too little agreement
Three most basic budget solutions
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Reduce expenses
Restructure debt
Increase income
More personal budget solutions
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Resolve personal problems
Reconcile competing goals
Improve management
Ways to stick to a budget
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Get rent out of way
Stay away from the ATM
Leave money at home
Record credit card purchases
Save automatically
Keep money in large coins or bills
Save your change
Ways to stick to a budget
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Keep checkbook balanced
Set goals
Consider tradeoffs
Take your lunch
Pay yourself first
Bank your refunds
Continue paying a loan
Shop second-hand
Ways to stick to a budget
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Try crash savings – Zero based budgeting
Save extra paychecks
Break costly habits – consider trade-offs
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Reducing your spending
http://www.calcbuilder.com/cgibin/calcs/SAV13.cgi/uiue
Cost of smoking
http://ashline.org/ASH/quit/contemplation/index.
html
Budget Challenges
 Cash
or ATM withdrawals
 Variable income
 Impulse buying
 Gifts
 Bookkeeping errors
 Attitude challenges
Budget Challenges
Credit
Types of credit cards
 Limited
purpose credit cards
 National credit cards
 Bank
credit cards
 Travel & entertainment charge cards
Things to look for:
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Annual fee
Interest rate
Additional perks
 insurance, discounts, cash back bucks
Cash advance
Hidden fees
 transaction fees
 cash advance fees
 over credit limit fee
 late fee
CAUTION!
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“No payment for 6 months”
“Low introductory offer - 4.9%”
“No fee”
“Balance transfers”
Loan sharks
Tips to lower costs
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Switch to a lower rate card
No annual fee
Take advantage of your grace period
Ask for lower interest rate
Pay more than the minimum balance
If paying interest, mail check as soon as you
receive your statement
Use savings to pay credit card bills
Credit Problem Signs
Not knowing how much you owe
 Making minimum payments
 Making cash advances to pay bills
 Working 2nd job to keep up with spending
 Being consistently late with bill payments
 Being denied credit
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To obtain a credit report
Must be in writing:
full name, address, old address - (2 years)
social security number
date of birth
current employer
telephone number
$8.00
sign request
Three major credit bureaus
Equifax 1-800-556-4711
Experian 1-800-353-0809
Trans Union 1-800-680-7293
Assignment: Develop a Resource
Section of money-saving tips
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Food
Automobiles
Insurance
Recreation/entertainment
Clothing
Savings
Variable household expenses