module 8 Discussion Question
tmlllett2
CHAPTER06.pptECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
WHAT’S AHEAD
6.1 Choose Financial Goals
6.2 Track Income and Expenses
6.3 Your Budget Worksheet
6.4 Create Your Budget for the Year
Economic Educatin for Consumers
Economic Educatin for Consumers
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Chapter 6
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Chapter 6
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
LESSON 6.1
Choose Financial Goals
GOALS
Identify your financial goals.
Explain how your goals might affect your family and community.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
KEY TERM
budget
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Types of Financial Goals
Budget
Short-term financial goals
Long-term financial goals
Balancing short-term spending with long-term success
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Your Goals Affect Others
Your family and your goals
Your current family
Your future family
Your community and your goals
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Why should your short-term goals fit in with your life-span goals?
Why do other members of a community benefit when individuals within that community achieve their life-span goals?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Why should your short-term goals fit in with your life-span goals?
If a person’s short-term goals do not contribute to his or her life-span goals, it is unlikely that these goals will ever be achieved.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Why do other members of a community benefit when individuals within that community achieve their life-span goals?
Other members of a community will benefit because individuals who achieve their life-span goals will be productive citizens in their chosen careers and spend income in that community, pay taxes, and not require public assistance.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
LESSON 6.2
Track Income and Expenses
GOALS
Describe how to set up an effective filing system for your records.
Explain the difference between fixed and flexible spending.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
KEY TERMS
fixed expense
flexible expense
luxury good
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Keep Financial Records
Track your income
Track your spending
Establish a filing system
Effective record keeping
How to use financial records
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Fixed and Flexible Expenses
Fixed expenses: amounts you are committed to spend
Flexible expenses: amounts that you can choose to spend or not to spend
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Describe a filing system you could set up to keep records of your financial transactions.
How do fixed and flexible expenses affect your spending plan?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Describe a filing system you could set up to keep records of your financial transactions.
A filing system needs to be . . .
comprehensive
easy to use
easy to maintain
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
How do fixed and flexible expenses affect your spending plan?
Fixed expenses must be paid and therefore must be included in a spending plan.
Flexible expenses may be important, although not required, and should be included in a spending plan, but not to the extent that they prevent payment of fixed expenses.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
LESSON 6.3
Your Budget Worksheet
GOALS
Identify steps you should take to create a budget worksheet.
Explain common problems with budgeting.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
KEY TERM
budget worksheet
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Create Your Budget Worksheet
Step 1: Create a worksheet
Step 2: Estimate your income
Step 3: Estimate your expenses and savings
Step 4: Record your actual income and expenses
Step 5: Calculate the differences
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Budget Pitfalls
Few consumers have realistic budgets.
Some people get too specific.
Some people don’t predict the correct amount of their flexible expenses.
Some people lump too many expenses under miscellaneous.
Some people give up on budgets because they think budgets take too much time and effort.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
What steps should you take to create a budget worksheet for yourself?
What are some problems people may encounter when trying to budget?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
What steps should you take to create a budget worksheet for yourself?
The best way to estimate future income and spending is to examine past income and spending.
Maintaining an accurate and complete record of income and spending will enable an individual to construct an appropriate one-month budget worksheet.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
What are some problems people may encounter when trying to budget?
People run into problems with budgets when they . . .
Are too detailed
Incorrectly predict the amount of flexible expenses
Lump too many expenses under the miscellaneous category
Fail to set aside time to maintain the budget
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
LESSON 6.4
Create Your Budget for the Year
GOALS
Evaluate and adjust your budget worksheet.
Explain why consumers should create and update yearly budgets.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
KEY TERM
audit
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Evaluate Your Budget Worksheet
Adjust your spending
Make several plans
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Budgeting for the Year
Review and adjust your budget
Relate your goals to your budget
Adjust to changing goals
Family budget
Planning together
Compromising
The budget cycle
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
Sample Family Budget
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© 2010 South-Western, Cengage Learning
Home 44.0%
Clothes 13.7%
Savings 5.0%
Entertainment 5.2%
Food 9.8%
Utilities 9.5%
Car 12.8%
© 2010 South-Western, Cengage Learning
Chart1
| 0.05 |
| 0.052 |
| 0.095 |
| 0.098 |
| 0.137 |
| 0.128 |
| 0.44 |
Sheet1
| 0.05 | 0.052 | 0.095 | 0.098 | 0.137 | 0.128 | 0.44 |
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
How should you adjust your budget worksheet to receive the greatest satisfaction from your income over time?
What steps should people take to create and update their yearly budgets?
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
How should you adjust your budget worksheet to receive the greatest satisfaction from your income over time?
If your spending exceeds estimates, you can either adjust your spending estimates or change your spending habits.
You should choose whichever option best meets your life-span goals.
Completing several budget worksheets will show various spending and saving options and allow you to select the one that works best for you.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
ECONOMIC EDUCATION FOR CONSUMERS ○ Chapter 6
What steps should people take to create and update their yearly budgets?
By reviewing your budget at least once a year, you can compare your financial plan with what actually happened.
You can also assess outcomes in light of any of your goals that may have changed.
With these evaluations in mind, you can make appropriate adjustments for your next year’s budget.
© 2010 South-Western, Cengage Learning
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© 2010 South-Western, Cengage Learning
