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www.TakeChargeAmerica.org

Act Your WageLearning to budget based on your income.

© 2015, Take Charge America


What is a Budget?

A plan for spending your money.

Understanding:

• what’s coming in

• what’s going out

• where it’s going


The Do’s and Don’ts of Budgeting

• Do identify where you are spending your money

• Do set goals for your spending

• Do write it down

• Do make a list of your expenses

• Don't think of a budget as a punishment

• Don’t make your budget too rigid


Are You Budgeting?

• If you are not saving, you are not budgeting!

• 40% of Americans live on 110% of their income.

• 70% of people who get instant wealth lose it in about 4 years.


Three Elements of a Budget

• Income

•Fixed Expenses

•Variable Expenses


Regular or Anticipated Income

• Regular take-home pay; after deductions

• Pension

• Social Security

• Veteran’s benefits, worker’s compensation, welfare, etc.

• Interest on loans or savings accounts

• Alimony

• Child support

http://www.google.com/url?sa=i&rct=j&q=income coming in&source=images&cd=&cad=rja&docid=ylYcKEOw2fRNOM&tbnid=xEn9wNtMDbLudM:&ved=0CAUQjRw&url=http://www.workingwritersclub.com/5909/writing-tips/create-a-viable-income-stream-in-just-30-minutes-a-day/&ei=sTsBUv24C4a8jAK2nYCIDg&bvm=bv.50310824,d.cGE&psig=AFQjCNGv-e3CYgAxxuEJwGMQi6pTwVNt3g&ust=1375898871775598


Fixed Expenses

• Any expense that stays the same month to month.

• What you know you must spend each month:

• Rent/Mortgage

• Car Payment

• Insurance


Variable Expenses

A cost that changes over time, depending on how much you use.

• Utilities

• Groceries

• Gas for vehicle


Needs vs. Wants

Need: something that is important or required

• Food, water, shelter, clothing

Want: something you desire but can live without

• Designer clothes, luxury vehicle, vacation, new cell phone

Our “WANTS” are what get us into

trouble!


Meet the Flays

• Allen and Gina Flay have been married 7 years.

• Their daughter Kimberly is 5 years old.

• They enjoy taking Kimberly places & creating memories.

• They recently purchased a new puppy that Kimberly named Dimples.


Time for the Flays to Act Their Wage

• As of this month, Allen is currently the only income earner.

• Gina has decided to go back to school full time to pursue a college degree.

• What they could afford in the past, they may not be able to afford while Gina is in school.

• We are going to budget according to their income.


A What is your income: _______________

Section 1 Section 2

Purchases Cost Pay Pass Cost

$ SAVINGS $170 X $ 170.00

1 Shelter $800 X $ 800.00

2 Utility Bills $235 X $ 235.00

3 Medical Prescription $25 X $ 25.00

4 Doctors Co-pay $20 X $ 20.00

5 Groceries $305 X $ 305.00

Total $ 1,555.00

You have $145.00 left to spend

6 Cell Phone $150

7 Friday Night Movie $30

8 Trip to Zoo $60

9 Family Picnic in the Park FREE

10 Birthday Gift $25

Locate the letter at the top of your paper:

A, B or C


The Flay’s WageBased on the letter, enter the appropriate income for the Flays on the top line on the budget form.

A B C


Pay Yourself First!

What the Flays should save has been entered for you on the first line in Section 1.

A What is your income: _______________

Section 1 Section 2

Purchases Cost Pay Pass Cost

$ SAVINGS $170 X $ 170.00

1 Shelter $800 X $ 800.00

2 Utility Bills $235 X $ 235.00

3 Medical Prescription $25 X $ 25.00

4 Doctors Co-pay $20 X $ 20.00

5 Groceries $305 X $ 305.00

Total $ 1,555.00

You have $145.00 left to spend

6 Cell Phone $150

7 Friday Night Movie $30

8 Trip to Zoo $60

9 Family Picnic in the Park FREE

10 Birthday Gift $25


DetermineNEEDS vs. WANTS

Needs

• Shelter

• Utility Bills

• Prescriptions

• Doctors Co-Pay

• Groceries

If they own a vehicle

• Vehicle

• Oil Change

• Insurance

• Vehicle Brakes

• Gas


Let’s Discuss! What expenses did you budget for and why?


Is There Enough Money?

When the budget doesn’t balance…what are the alternatives in order to save money?


Alternative #1

Cable & Internet

Bundle of Cable Service

and Internet =

$129.98 per month

Netflix & Internet

Internet Service - $41.99

Netflix Streaming Services -

$7.99

Total = $49.98 per month

Savings = $80.00 per month


Alternative #2

Eating Lunch OutMcDonalds $6.48

Subway $5.78

Pizza Hut $7.84

Burger King $5.28

Paradise Bakery $8.93

Total: $34.31

Lunches for one week

Packing a LunchLoaf of Bread $1.68

Deli Meats & Cheese $6.78

Jar of Peanut Butter $2.50

Bag of Chips $2.50

Jelly $ 2.98

Mayo $2.75

Lunch Bags $1.50

Case of Water (24 count) $2.99

Total: $23.68 or $2.37 a day (10 days)

Lunch for 2 weeks


Alternative #3

Salon Beauty Care

• Hair - Color and Style $100.00

• Nails – Manicure/ Pedicure $45.00

Total = $145.00

Beauty Care at Home

• Hair - Box of Hair Color $7.99

• Nails

• Nail Polish $3.99

• Nail care kit $4.99

Total = $16.97


Alternative #4

Ready-Made Meal

Price = $11.99

Homemade Garlic Chicken

• Pound of Chicken $3.79

• ½ lb. of Broccoli $0.79

• ½ lb. of Carrots $0.69

• Box of Pasta $0.99

• Garlic Seasoning packet $0.79

Total = $7.05


Let’s look at some wealthy celebrities who blew through millions of dollars.

Even if you have a lot of money – budgeting is still important!


.

Three Poor Millionaires

Michael Jackson

In 2007 - Jackson filed for bankruptcy because he could not pay back a $25 million loan on his home, Neverland Ranch.


Lindsay Lohan

• Owes the IRS $234,000 in unpaid taxes.

• “Her finances are a mess," one insider said. "She lives very large, staying at the best hotels and traveling first-class. All the money she earns she spends, and then when it comes to taxes, she has nothing left.”


Warren Sapp

• Made $82 million during his football career

• Filed for bankruptcy in 2012

• Owed $6.7 million to his creditors.

• Owed nearly a million dollars to the IRS.


So…How should you budget?

TCA has helped millions of people learn to budget and manage their debt.

Here is the strategy we have found works best.


The Budget Pie

38%

16%13%

5%

18%

10%

Housing

Transportation

Food

Debt

Other

Savings

Recommended Budget Percentages


Budgeting - a Piece of PIE Housing – 38%

• Mortgage • Repairs • Taxes• Insurance • Miscellaneous

Transportation – 16% • Car Payment • Gas • Insurance

• Groceries Debt – 5%

• Credit Cards• Student Loans • Personal Loans• Medical Bills

Other – 18%• Entertainment • Hobbies • Shopping • Dining Out• Movies

Savings – 10%• Saving for TODAY• Saving for TOMORROW• Saving for a RAINY DAY • Saving for an EMERGENCY


Budgeting Example #1

44%

23%

8%

13%

21%

1%

Housing

Transportation

Food

Debt

Other

Savings

A single woman -- 50 percent of her income is commission based. Is this budget suitable for her?

Remember: The recommended

percentages are:

Housing – 38%Transportation- 16%

Food- 13%Debt – 5%

Other – 18%Savings – 10%



11%

37%

19%0%

22%

11%

Housing

Transportation

Food

Debt

Other

Savings

A retired couple -- their mortgage is paid in full. Is this a suitable budget for them?


percentages are:






Newly married couple planning to have a baby. Is this budget suitable for them?

38%

16%13%

5%

18%

10%

Housing

Transportation

Food

Debt

Other

Savings


percentages are:





Your turn!


Budgeting Step 1: Review Last Month's Spending

• See where your money went.

• Analyze where you can cut back.

• Online banking can categorize your money for expenses, such as dining, food and utilities.


Budgeting Step 2: Keep Records of Earning & Spending

• Help you organize and plan your spending

• Help you figure income taxes

• Tell where your money is going or should be going


Budgeting Step 3: Reduce Expenses

• Eliminate unnecessary routine purchases

• Look at your utilities and see how you can cut back

• Electric

• APS – Limited Income Program (E-3)

• APS – Medical Equipment Program (E-4)

• SRP – Economy Price Plan

• SRP – Medical Discount

• Great website for Energy Saving

• http://www.we-energies.com/energy-saving_ideas/tips/101tips.htm

• Water

• Turn faucet off when brushing teeth, shaving Saves 5 - 10 gal/person/day

• Install a faucet aerator on your bathroom sink Saves 5 - 10 gal/person/day

• Install a faucet aerator on your kitchen sink Saves 10 - 20 gal/day

• Don't use your toilet as a waste basket Saves 3 - 7 gallons/flush

http://www.we-energies.com/energy-saving_ideas/tips/101tips.htm

http://www.naturesvoice-ourchoice.org/conservation-devices.html

http://www.naturesvoice-ourchoice.org/conservation-devices.html


Explore Other Options

• Address your insurance costs -- Call and ask for a better quote

• Actively manage your credit

• Better credit = More options

• More financial options and better deals

• Call cell phone provider and negotiate for a better rate


Be a Smart Shopper

• Choose to do without.

• Don’t be a brand snob.

• Cook from scratch.

• Have a shopping list.

• Learn how to read store price labels.

• Avoid expensive prepared or frozen foods.

• Buy in bulk to save money, but don’t overbuy.

• Clip and use money-saving coupons.


Things to Remember

• Be honest about your spending habits and you’ll end up with a much more realistic budget.

• Don’t forget to budget for fun; budgeting isn’t about total deprivation.

• Don’t be afraid to change your budget; a good budget is always evolving.

• Earn more, or spend less, but definitely…

ACT YOUR WAGE!


Call: 866-750-9612

Take Charge America is a non-profit financial education and credit counseling organization. We are dedicated to helping people nationwide improve their financial futures through educational outreach, credit counseling and debt management solutions.

act your wage - dysart high school your wage... · act your wage learning to budget ... • srp...

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