Budgeting Budgeting ProcessProcess

What it is:What it is:

A plan for spending and savingA plan for spending and saving

What it takes:What it takes:

Choosing a budgeting periodChoosing a budgeting period Estimating expenses and incomeEstimating expenses and income Balancing expenses and incomeBalancing expenses and income

What a budget does for What a budget does for you:you:

Puts you in controlPuts you in control Helps you create a visual spending pictureHelps you create a visual spending picture Helps you prevent impulse spendingHelps you prevent impulse spending Helps you decide what you can and cannot Helps you decide what you can and cannot

affordafford Enables you to keep track of how you spend your Enables you to keep track of how you spend your

moneymoney Helps you create a savings planHelps you create a savings plan Helps you decide how you can protect yourself Helps you decide how you can protect yourself

against the financial consequences of unforeseen against the financial consequences of unforeseen eventsevents

setting up and setting up and maintaining a maintaining a

budget budget

StepsSteps

1. 1. Estimate your income.Estimate your income.

2. 2. Estimate your expenses to include:Estimate your expenses to include: Fixed regular monthly expensesFixed regular monthly expenses Fixed irregular monthly expensesFixed irregular monthly expenses Flexible monthly expensesFlexible monthly expenses ““Mad money”/Personal expensesMad money”/Personal expenses

Steps (cont’d)Steps (cont’d)

3. 3. Estimate your future expenses.Estimate your future expenses. Begin by keeping a record of everything Begin by keeping a record of everything

you spend.you spend. What are your financial goals and your What are your financial goals and your

plans for obtaining those goals?plans for obtaining those goals?

4. 4. Cope with change.Cope with change. Plan for new situations.Plan for new situations. Plan for changing conditions that Plan for changing conditions that

increase or decrease your expenses.increase or decrease your expenses.

Steps (cont’d)Steps (cont’d)

5. 5. Keep your personal and financial goals Keep your personal and financial goals in mind.in mind. Set money aside to help meet financial goals.Set money aside to help meet financial goals.

6. 6. Balance your budget.Balance your budget. Each month, compare your income to your Each month, compare your income to your

expenses. Continue reworking your budget expenses. Continue reworking your budget until your income is greater than your until your income is greater than your expenses.expenses.

Discuss different budget options available.Discuss different budget options available.

7. 7. Practice setting up a personal budget.Practice setting up a personal budget.

Tips for Maintaining a Tips for Maintaining a BudgetBudget

1. 1. Become a good consumer.Become a good consumer. Learn how to get the most for your money.Learn how to get the most for your money.

2. 2. Exercise will-power and self-control.Exercise will-power and self-control. Try to not indulge in unnecessary spending.Try to not indulge in unnecessary spending.

3. 3. Develop a good record-keeping system.Develop a good record-keeping system. Learn how to maintain a workable budget.Learn how to maintain a workable budget.

4. 4. Evaluate your budget regularly.Evaluate your budget regularly.