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8.4 LIVING EXPENSES
TransportationGroceries
Gas/Fuel
Home Insurance
Car Insurance
Education
Rent/Mortgage
Utilities
Child Care
Medical
Emergency Fund
CREATE & BALANCE A BUDGET In order to plan for the future, you need
a budget. Take Simon, a grade 12 student working part time. His budget looks like this:
INCOME ($) EXPENSES ($)
Week 1 136.74 College Savings
200
Week 2 188.20 Insurance 123
Week 3 209.38 Fuel 75
Week 4 173.66 Entertainment
100
Total 707.98 Total 498
Balance (Income – Expenses) = 707.98 – 498 = 209.98According to this balanced budget, Simon is able to save
just over $200 a month
CHANGE IN COSTS Every year, expenses go up, for example:
Car Insurance increases by 5% Grocery Expenses increase by 10% Home Heating Costs rise 15%
Simon’s budget was simple, as the only expenses he had were: College Savings Insurance Fuel Entertainment
Let’s look at what a family budget would look like.
INCOME ($)
Spouse 1 3200
Spouse 2 2900
Total 6100
EXPENSES ($)
Fixed Expenses Variable Expenses (Average)
Mortgage & Property Tax 2040 Groceries 800
House Insurance 32 Electricity 120
Car Insurance 188 Heating 220
Life Insurance 500 Water 65
Long-Term Savings 580 Telephone 35
RESPs 400 Internet 35
Cable Television 30
Medical 170
Clothing 150
Home Repair Account 200
Charities 50
Entertainment 200
Vacation Amount 200
Children’s Accounts 150
Gift Account 100
Total Fixed 3640 Total Variable 2460
Total Expenses 6100
RE-BALANCING BUDGETS Expenses change over time, so one must
be prepared to re-balance a budget What if expenses go up as discussed
before?Car Insurance increases by 5%Grocery Expenses increase by 10%Home Heating Costs rise 15%
The couple would have to rebalance their budget
Which expenses would they have to modify?Variable Expenses
8.4 HOMEWORK p. 472 #1, 3, 6
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