Personal Finance

Basic Personal Finance
“Budget Budget”
04/22/20
AGENDA
•Purpose
•Budgeting
•Credit Cards
•Saving
04/22/20
PURPOSE
To provide people with a Better

Understanding of personal financial planning
for you to make more informed decisions.
The Haves
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and Have Nots
“70 percent of people who had
unexpectedly come into large
sums of money ended
up broke within seven years.”
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Going Broke
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“Fail to Plan, You
Plan to Fail”
04/22/20
Budgeting
• Almost everyone hates

to budget
• You must have a good
idea of your income and
expenses
• For one month = keep
track of every penny you
spend. You’ll be
shocked to see where
your money goes
04/22/20
Reasons to Budget
Gives you control over your money – A budget is a way

of being intentional about the way you spend and save your
money. It is said that with budgeting, you control your
money and not your money controls you. Budgeting saves
you the stress of suddenly having to adjust to lack of funds
because you did not initially plan how to spend them. It
also helps you decide if you want to sacrifice short term
spending like buying coffee everyday in exchange for a
long term benefit like a cruise vacation or a new HDTV.
04/22/20
Reasons to Budget
Keeps you focused on your money goals – You avoid

spending unnecessarily on items and services that do not
contribute to attaining your financial goals. If you are
working with limited resources, budgeting makes it easier to
make ends meet.
04/22/20
Where’s My Money
04/22/20
Reasons to Budget
Makes you aware what is going on with your

money – With budgeting, you are clear on what
money is coming in, how fast it goes out, and
where it is going to. Budgeting saves you from
wondering every end of the month where your
money went. A budget enables you to know what
you can afford, take advantage of buying and
investing opportunities, and plan how to lower
your debt. It also tells you what is important to you
based on how you allocate your funds, how your
money is working for you, and how far you are
towards reaching your financial goals.
04/22/20
Reasons to Budget
Helps you organize your spending and savings – By

dividing your money into categories of expenditures and
savings, a budget makes you aware which category of
expenditure takes which portion of your money. That way,
it is easy for you to make adjustments. Budget also serves
as a reference for organizing your bills, receipts, and
financial statements. When all of your financial
transactions are organized for tax time or creditor
questions, you save time and effort.
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Reasons to Budget
Makes you decide in advance how your money will

work for you.
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Reasons to Budget
Enables you to save for expected and

unexpected costs – Budgeting allows you to
plan to set aside money for emergency costs.
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Reasons to Budget
Enables you to communicate with your significant

others about money – If you share your money with your
spouse, family, or anyone, a budget can communicate how
you use money as a group. This promotes teamwork on
working for common financial goals and prevents conflict
on how money is used. Creating a budget in tandem with
your spouse will avoid conflicts and resolve personal
differences on how your money is spent. Budgeting
teaches family members spending responsibility and
accountability.
04/22/20
Reasons to Budget
Provides you with an early warning for potential

problems – When you budget and take a “big picture”
view, you will see potential money problems in advance,
and be able to make adjustments before the problem
appears
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Reasons to Budget
Helps you determine if you can take debt and how

much – Taking debt is not necessarily a bad thing if the
debt is necessary or you can afford it. Budgeting shows
you how much a debt load you can realistically take without
being stressed or if taking the debt load is worth it.
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Reasons to Budget
Enables you to produce extra money – In budgeting, you

get to identify and eliminate unnecessary spending like late
fees, penalties and interests. These seemingly small
saving can add up over time.
04/22/20
The Basic Categories
1.Shelter – Rent, Mortgage

2. Food – Groceries, Eating Out
You Cook at home you save $$$$
3. Utilities – Power, Cable, Phone, Internet
4. Clothing – Usually where the reality check
needs to happen
5. Transportation – Gas, Metro, or Foot.
6. Entertainment – The Fun Money
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Just Because you got it doesn’t mean you spend it
• Set Goals
• Save up for Big Things
• Be Real with yourself and take
Accountability
• Live within your means
• Saving Money opens doors.
04/22/20
Three Main Tenets of Personal Finance
• Savings
– Emergency Fund (Liquid)
• Investing
– Individual Retirement
Accounts (IRA)
– Federal Thrift Savings Plan
– Stocks?
• Insurance
– Term vs. Whole Life
– Annuities
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Getting Started
Everyone can begin saving

something
• Start with what ever you can month if nothing else
• Cents turn to Dollars, Singles to Fives, Fives to Tens,
Tens to Twenties, Twenties to Fifties, and Fifties to
Hundreds.
04/22/20
Emergency Savings
Rainy days will happen….

• You need 3-6 months of living expenses saved
• Very liquid….not in CDs, mutual funds, etc.
• The more secure your job, the less you need
• More responsibilities = larger savings needed
This is all Ideal Thinking.
04/22/20
Scenarios
If you saved what you spend on a weekend,

over a few months you might be able to
finance a nice vacation.
A Trip to Paris is 1,800
Average Weekend you spend $150
150 x 12 = 180, 12 weeks you can go on a
vacation
04/22/20
Scenarios
Billy Makes 1,800 a Month

(900 every 2 weeks)
Lives at Home (No Rent :D)
04/22/20
Credit Cards
Are only bad if you

allow them to be.
•Pay in full on time
•Utilize to free up
Cash
•Build Credit
•Provide Emergency
Cash Flow
•Give Perks
04/22/20
The Last Word…..
If you take nothing else away….

Start now!
04/22/20
QUESTIONS ?
“The world is moving so fast these
days that the man who says it
can't be done is generally
interrupted by someone doing
it.”

Personal Finance

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Basic Personal Finance

To provide people with a Better

• Almost everyone hates

Gives you control over your money – A budget is a way

Keeps you focused on your money goals – You avoid

Makes you aware what is going on with your

Helps you organize your spending and savings – By

Makes you decide in advance how your money will

Enables you to save for expected and

Enables you to communicate with your significant

Provides you with an early warning for potential

Helps you determine if you can take debt and how

Enables you to produce extra money – In budgeting, you

1.Shelter – Rent, Mortgage

Everyone can begin saving

Rainy days will happen….

This is all Ideal Thinking.

If you saved what you spend on a weekend,

Billy Makes 1,800 a Month

Are only bad if you

If you take nothing else away….

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