BASIC BUDGETING SKILLS

   The Food and Care Coalition held a special workshop on basic budgeting skills. Christy Banks, a local CPA and Food and Care Coalition Board Member, provided clients with the following budgeting information:

   A budget is a plan used to make the most of your money. A budget can be done for any time period (monthly, bi-monthly, weekly, etc.). You should always budget with a financial goal in mind! Goals could include a vacation, retirement, rainy day fund, savings, future medical or dental bills, paying off credit cards, etc.

Benefits of Budgeting

  • Helps you identify the amount you spend each month.
  • Helps you identify your expenses and spending habits.
  • Helps you prepare for major or unexpected expenses.
  • Helps you control how you spend your money.

Budgeting Terms

  • Fixed expenses - Expenses that occur regularly, and the amounts generally don't change from month to month. Examples include rent, car payments, insurance payments, and loan payments.
  • Flexible expenses - Expenses that occur on a regular basis and still must be paid, but the amount varies from month to month. There is an element of control involved in how much you spend. Examples include groceries and long distance phone bills.
  • Discretionary expenses - Expenses that you choose to occur. Examples include new clothes, going to movies, and gifts.

Budgeting Steps

  • List the amount of money you bring in every month (remember to use net (after taxes) income.)
  • List how much you actually spend on items.
  • Breakdown of expenses: fixed, flexible, and discretionary.
  • Take net income and subtract expenses to get leftover or savings amount.
  • Write budget down on paper.
  • LOOK AT BUDGET AND USE IT!
  • At end of budget period, compare budget with what actually happened.
  • Ask yourself are my goals and budget reasonable?
  • Adjust budget if needed.

How can you make adjustments in your budget to make your money go further?

  • Increase money coming in by working additional hours, getting additional work, etc.
  • Decrease expenses. Adjust flexible and discretionary spending.

Ways to Stick to Budget

  • Always shop with your budget in mind.
  • Avoid impulse buying.
  • Compare prices at different stores.
  • Always track expenses. A check register can be very helpful.

   Wells Fargo Bank has donated "Banking on our Future" computer CD's for client's use. The CD discusses basic budgeting skills, checking and savings accounts, and basic investing. If your clients would like a copy to use in our computer lab or at home, please see Kena. Kena also has some left over worksheets available from the budgeting workshop.