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Diving Into Spending Plans!
How to budget your money properly
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 2Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Today We’ll Talk About
Spending Plan/Budget - What is it? Why use it?
Income and Expense
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 3Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Why do you think this happens? People do not make enough money People spend too much money
Almost half of all American families spend more money than they
make.
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 4Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Values, Needs, & Wants What is a need?
Something that is a necessity Food, water, shelter...
What is a want? Something that is not a necessity but is desired Coffee from Starbucks, skis
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 5Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Why do needs and wants matter?
Trade-Offs and Opportunity Costs
Trade-off - giving up one
thing for another
Opportunity cost – the
value of the next best
alternative that must be
forgone as a result of a decision
Use trade-offs and
opportunity costs to help
you make these
decisions
Is the trade-off to your decision a need or a want? What is the value (opportunity cost) of that trade-
off to you?
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 6Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Spending Plan/Budget - What is it?
A spending plan/budget is A tool to help people manage their money
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 7Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Spending Plan/Budget - Why use it?Why would you want to know where your
money is going?
Spending plans/budgets are used to help people Track where their money is going Identify income and expenses Meet financial goals
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 8Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
A Spending Plan/Budget Tracks…..
Income Money earned
Expense Money spent
Variable: Changes each month Fixed: Remains the same each
month
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 9Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Spending Plan/Budget Contents Income Expenses: Fixed or
variable? Housing Utilities Transportation Savings Food Insurance Clothing
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 10Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
Lee’s Spending Plan Example
Income ExpensesItem Amount Item Amount
Mowing a lawn
$10.00 Movie ticket and popcorn
$15.00
Birthday gift
$15.00 Snack and drink
$5.00
Total $25.00 Total $20.00
Does Lee have enough income to pay his expenses?
If he would like to buy a new shirt for $15, does he have enough money?
© Take Charge Today – Edited April 2007– Diving Into Spending Plans – Slide 11Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences at the
University of Arizona
1.2.41.G1
In Conclusion A spending plan is
A tool to help people track their money A spending plan is based on
Values, wants, and needs A spending plan tracks
Income and expenses
The End!