budgeting money management. the basic economic problem: limited resources and unlimited wants and...
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BudgetingMoney Management
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THE BASIC ECONOMIC PROBLEM:
Limited Resources
And
Unlimited Wants And Needs
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FINANCIAL PLANNING STEPS:
Set Goals
Analyze InformationCreate A Plan
Implement The PlanMonitor and Modify
The Plan (Evaluate)
Set New Goals (Continue Process)
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FINANCIAL PLANNING PROCESS DECISION-MAKING
PROCESS
Set Goals
Analyze Informatio
n
Create A Plan
Implement the Plan
Monitor and Modify
the Plan
Set New Goals
Identify the Goal
Gather Information
Analyze Outcomes
Examine Alternatives
AlternativeChoices
Make A Decision
Evaluate Results
Set New Goals
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MY SMART GOALS Worksheet For Short-Term, Medium-Term and Long-Term. Complete Two Goals For Each Time Frame.1.Short-Term-achievable in 0-3 months.2.Intermediate or Medium-Term-achievable in 3-12 months.3.Long-Term-achievable from 1 year or greater.
Specific GoalAchievement
Date
Timeline (Short,
Intermediate,Or Long-Term)
Estimated Cost
Amount toSave Per
Week
Buy Christmas Presents
12/25/05 Short $200 $67 [200/3]
Beach Trip 07/04/06 Intermediate $500 $18 [500/28]
Down payment on car
08/05/07 Long $1000 $12 [1000/84]
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Thompson's Paper
Company
Budget Varianc
e Report
For November, 20 ____
DESCRIPTION
Budgeted
Actual
Variance
Receipts:
Sales of Pulp
$148,350.00
$148,350.00
__________
Sales of Boxes
$69,200.00
$72,250.00
__________
Total Receipts
$217,550.00
__________
__________
Payments:
Wages
$110,000.00
$115,000.00
__________
Rent
$15,800.00
$15,800.00
__________
Gas and Electric
$3,250.00
$3,380.00
__________
paper Supplies
$45,700.00
$46,400.00
__________
Office Expenses
$4,850.00
$4,550.00
__________
Equipment Repairs
$2,500.00
$2,145.00
__________
Insurance
$5,760.00
$5,760.00
__________
Taxes
$23,750.00
$22,480.00
__________
Telephone
$1,490.00
$1,560.00
__________
Total Payments
$213,100.00
__________
__________
Balance
$4,450.00
__________
__________
Balance Sheet
Cash Flow Statement
is helpful in establishing budget categories
is helpful in setting goals when budgeting
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Balance Sheet
Assets Liabilities
Checking account 500.00 Home mortgage 50,000.00
Savings account 2,000.00 Credit card balance 300.00
Home $90,000.00 Loan $2,000.00
Automobile 5,000.00
Furniture $6,000.00 Total Liabilities $52,300.00
Computer $1,500.00
Jewelry $1,000.00 Owner’s Equity
Total Assets minusTotal Liabilities
$53,700.00
Total Assets $106,000.00
Total LiabilitiesAnd Owner’s Equity $106,000.00
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Personal Cash Flow Statement
Monthly Cash Inflows (Income)
Net Income (take home pay)
$1,500.00
Other Income (interest) $30.00
Total Income $1,530.00
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Monthly Cash Outflows (Expenditures)
Savings $150.00
Rent$400.00
Food $350.00
Clothing $50.00
Electricity/Gas $90.00
Telephone $30.00
Car $250.00
Personal Expenses $20.00
Entertainment $50.00
Total Savings and Expenditures $1,390.00
Net Cash Flow $140.00
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Budget
•a plan for saving and spending•helps achieve financial goals•helps avoid credit problems•must be evaluated from time to time•is essential for consumers, businesses and governments
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occur regularlysame amount each time
differ each time
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Monthly Budget
Get a NEFE High School Financial Planning Guide [yellow books near the phone].
Turn to Unit Three You are to read page 27 – 32. Don’t complete any of these
worksheets, we’ll do them together in class.
Get a NEFE High School Financial Planning Guide [yellow books near the phone].
Turn to Unit Three You are to read page 27 – 32. Don’t complete any of these
worksheets, we’ll do them together in class.