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Managing Your Finances Part II Management of Financial Resources

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Managing Your Finances Part II Management of Financial Resources
Managing Your Finances
Part II
Management of Financial Resources
What is a Budget ?
Copyright
Copyright © Texas Education Agency, 2012. These Materials are copyrighted ©
and trademarked ™ as the property of the Texas Education Agency (TEA) and
may not be reproduced without the express written permission of TEA, except
under the following conditions:
1) Texas public school districts, charter schools, and Education Service Centers
may reproduce and use copies of the Materials and Related Materials for the
districts’ and schools’ educational use without obtaining permission from
TEA.
2) Residents of the state of Texas may reproduce and use copies of the
Materials and Related Materials for individual personal use only, without
obtaining written permission of TEA.
3) Any portion reproduced must be reproduced in its entirety and remain
unedited, unaltered and unchanged in any way.
4) No monetary charge can be made for the reproduced materials or any
document containing them; however, a reasonable charge to cover only the
cost of reproduction and distribution may be charged.
Private entities or persons located in Texas that are not Texas public school
districts, Texas Education Service Centers, or Texas charter schools or any entity,
whether public or private, educational or non-educational, located outside the
state of Texas MUST obtain written approval from TEA and will be required to
enter into a license agreement that may involve the payment of a licensing fee or a
royalty.
For information contact: Office of Copyrights, Trademarks, License Agreements,
and Royalties, Texas Education Agency, 1701 N. Congress Ave., Austin, TX
78701-1494; phone 512-463-7004; email: [email protected]
Copyright © Texas Education Agency, 2012. All rights reserved.
2
Consumer Activities
• Consumers have many financial decisions
to make throughout their lifespan.
– “How will I utilize the resources available to
me and my family?”
Copyright © Texas Education Agency, 2012. All rights reserved.
3
Resources Are Limited
• Financial planning can help consumers
and their families with their economic
choices.
Failure to Plan is Planning to Fail.
-Benjamin Franklin
Copyright © Texas Education Agency, 2012. All rights reserved.
4
What Is Financial Planning?
• The process of managing financial
(money) resources so you can achieve
your goals and dreams.
Copyright © Texas Education Agency, 2012. All rights reserved.
5
Financial Planning Begins With A
Decision Making Model
Step 1
Define
objective
Step 5
Step 2
Evaluate
decision
Determine
choices
Step 4
Step 3
Make
decision
Evaluate
choices
Copyright © Texas Education Agency, 2012. All rights reserved.
6
The First Step…
• Define the objective….
– To Develop and Maintain a Healthy Financial
Life!
Copyright © Texas Education Agency, 2012. All rights reserved.
7
The First Step…
• A good financial plan allows the consumer
and the family to:
– Live within their income
– Identify goals
– Prepare for emergencies
– Be financially independent
Copyright © Texas Education Agency, 2012. All rights reserved.
8
BUDGET
• The financial plan for:
– Spending $
– Saving $
Copyright © Texas Education Agency, 2012. All rights reserved.
9
BUDGET
• How to do it?
– Estimate Income – money coming in from
work, allowance, gifts, investments
– Estimate Expenses – money going out to pay
for life’s necessities….housing, food, car,
taxes…
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10
Preparing a Budget:
• Start with Income
– Gross Income (before taxes)
– Net Income (after taxes)
– Be sure to include irregular payments like
•
•
•
•
Bonuses
Tips
Gifts
Interest payments from savings and investments
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11
Preparing a Budget: Next Step
• Identify Expenses
– Fixed Expenses
• Rent or Mortgage
• Car Payment
• Credit Card Payment
– Variable Expenses
• Groceries
• Clothing
• Entertainment
Copyright © Texas Education Agency, 2012. All rights reserved.
12
What about SAVINGS??
• Always Treat Savings as an EXPENSE
– Preferably a FIXED EXPENSE!
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13
What about SAVINGS??
• Reasons to Save:
–Emergencies
–Goals such as:
»Vacation
»New car
»Education
»Retirement
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14
The BUDGET On A Monthly Basis..
• INCOME = Money comes in 
• Expenses = Money goes out 
• Balanced Budget = Zero!
– If the ending amount is + => More Savings! 
– If the Ending amount is - => Reduce
Expenses
OR
Increase Income!
Copyright © Texas Education Agency, 2012. All rights reserved.
15
Budget Practice
• Click the links to get some Budget Practice:
• "Determining Your Budget" from TheMint.org
• "Creating a Budget" from "learnfree.org"
Copyright © Texas Education Agency, 2012. All rights reserved.
16
Resources
• Lowe, Ross. Consumer Education and Economics. 6th ed. N.p.:
Glencoe/McGraw Hill, 2006. Print.
• "Clip Art, Photos, and Animations." Images. N.p., n.d. Web. 13
Oct. 2012. <http://office.microsoft.com/en-us/images/>.
• "Determining Your Budget." TheMint.org. N.p., n.d. Web. 13
Oct. 2012. <http://www.themint.org/>.
• Free Online Learning at GCFLearnFree.org." Creating a Budget.
N.p., n.d. Web. 13 Oct. 2012. <http://www.learnfree.org/>.
•
"What Is Financial Planning." What Is Financial Planning? N.p.,
n.d. Web. 13 Oct. 2012.
<http://www.fpanet.org/WhatisFinancialPlanning>.
Copyright © Texas Education Agency, 2012. All rights reserved.
17
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