Chapter 6 – Budgeting: How will you use your money?
Know all your Vocab.
1. What is a budget & how do your financial goals impact your budget? A budget is a way to divide income among spending and saving options. Budgets are usually based on the priorities of your goals, which should be assisted with a well developed budget.
2. Explain short-term and long-term goals. Give an example of each. Short term-Goals to achieve within a year or so, such as repairing your car. Long term – Goals that you want to achieve over more than a year, paying off school loans. 3. How can you estimate your income and spending for the near future? You could calculate how much money you spend in a month period and use that and calculate time periods that are longer. For example, find out how much you use and just set a budget to only spend that much. 4. What financial records do you need to keep?
You should always keep record of any spending that you have done and also all paychecks that show your income.
5. What are the characteristics of a good filing system?
Make sure your filing system is organized, complete, and easy to find whenever needed. 6. What are the seven steps to financial success? List and describe each. a. Create a worksheet – Have an organized chart to fill in with spending. b. Estimate your income – Be able to calculate net income and base spending on it. c. Estimate expenses and savings – Plan unexpected expenses and plan how much you are going to save. d. Record Income and Expenses – Make a chart and keep record of all receipts. e. Calculate Differences – Calculate if your spending is too high, if so adjust. f. Keep it simple – Too much information may get too confusing g. Establish Goals – Be able to know how much money you can actually save for goals.
7. When budgeting your finances for your short-term goals, what are some opportunity...