MY SPONSOR 2

PERSONAL FINANCE.

Slide Title. MODULE ONE: BUDGETING. LESSON ONE: UN DERSTANDING BUDGETING.

Slide Title. HOW TO BUDGET IN 7 STEPS. The specifics of your budget will depend on your personal financial situation and goals. In most cases, though, the steps for creating a budget are the same. You can make a budget by following seven simple steps..

4. LESSON TWO: PERSONAL BUDGETS. Individuals and families can have budgets, too. Creating and using a budget is not just for those who need to closely monitor their cash flows from month to month because "money is tight." Almost everyone—even people with large paychecks and plenty of money in the bank—can benefit from budgeting..

Slide Title. BUILDING A BUDGET. In general, traditional budgeting starts with tracking expenses, eliminating debt, and once the budget is balanced, building an emergency fund. But to speed up the process, you could start by building a partial emergency fund. This emergency fund acts as a buffer as the rest of the budget is put in place and should replace the use of credit cards for emergency situations. The key is to build the fund at regular intervals, consistently devoting a certain percentage of each paycheck toward it, and if possible, putting in whatever you can spare on top. This will get you to think about your spending, too..

6. STICKING TO A BUDGET. Now you understand the finer points of budgeting. You've accomplished all of the above, even put together a nice spreadsheet that lays out your budget for the next 15 years. The only problem is that sticking to that budget isn't as easy you thought. That credit card still calls your name, and your "clothes" category seems awfully small and you feel deprived. Budgets, you decide, are no fun. The good news is you don't have to throw it all out the window just because you've messed up once or twice..

Slide Title. AVOID IMMEDIATE DISASTER Don't be afraid to request bill extensions or payment plans from creditors..

8. LEVELS OF INVOLVEMENT IN THE BUDGETING PROCESS.

9. LESSON FOUR: NEEDS VS. WANTS: HOW TO BUDGET FOR BOTH DETERMINING NEEDS: Financial needs are expenditures that are essential for you to be able to live and work. They’re the recurring expenses that are likely to eat up a large chunk of your paycheck — think mortgage payment, rent or car insurance. IDENTIFYING WANTS: Wants are expenses that help you live more comfortably. They’re the things you buy for fun or leisure. You could live without them, but you enjoy your life more when you have them. For instance, food is a need, but daily lunches out are likely more of a want..

BUDGETING FOR BOTH NEEDS AND WANTS. So how do you start accounting for wants and needs in your budget? Begin by writing a list of all the things you buy. That means everything from toilet paper to life insurance. Then, group purchases into broad categories like toiletries, cable, phone and insurance..

Slide Title. Savings refers to the money that a person has left over after they subtract out their consumer spending from their disposable income over a given time period. Savings, therefore, represents a net surplus of funds for an individual or household after all expenses and obligations have been paid. Savings are kept in the form of cash or cash equivalents (e.g., as bank deposits), which are exposed to no risk of loss but also come with correspondingly minimal returns. Savings can be grown through investing, which requires that the money be put at risk, however..

Slide Title. SAVINGS ACCOUNTS A savings account pays interest on cash not needed for daily expenses but available for an emergency..

Slide Title. HOW TO CALCULATE YOUR SAVINGS RATE. One's savings rate is the percentag e of disposable personal income that is kept rathe r than spent on consumption or obligations. Say that your net income is $25,00 0 a year after taxes (i.e., your disposable income) and over the course of the year you also spend $24,000 in consumption, bills, and other expenditures. Your total savings are $1,000. Dividing savings by disposable inc ome yields a savings rate of 4% = ($1,000 / $25, 000 x 100)..

Slide Title. SAVINGS VS. INVESTING. People sometimes use the words savings and investing interchangeable, for instance saving for retirement in a 401(k) plan, but this usage is technically incorrect. Retirement "saving" is more accurately investing, since money put away in these accounts is used to purchase securities such as stocks, bonds, and mutual funds. When money is invested, it is at risk of loss—but that risk is offset by positive expected returns over time. Savings, in contrast, are by definition "safe" from any potential loss..