Financial Planning Basics _3 - Students

Financial Planning Basics _3 - Students - 1 Budgeting /...

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Unformatted text preview: 1 Budgeting / Spending Plans The main purposes of a budget are to help you Live within your income Spend your money wisely Reach your financial goals Prepare for financial emergencies Develop wise financial management habits 2 Steps in the budgeting pr ocess 1. Set financial goals 1. Estimate income from all sources 1. Budget amount for an emergency fund, periodic expenses and financial goals 1. Budget Fixed Expenses that you are obligated to pay 3 1. Budget Variable Expensesthe amounts that are to be spent for household and living expenses 1. Record Spending Amountsthe actual amounts for inflows and outflows, comparing actual amounts with budgeted amounts to determine variances 1. Review Spending and Saving Patterns 1. Evaluate whether revisions are needed in your savings and spending plans Successful Budgeting Tr aits Well-planned Realistic Flexible Clearly communicated 4 H I NTS I N M AKI NG A BUDGET- Don't set impossible limits- Don't ignor e your wants- Remember unexpected expenses- Don't under estimate the I MPORTAN CE of detailed r ecor ds of actual expenditur es What I s A Financial Plan ???...
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This note was uploaded on 02/06/2011 for the course HDF 322 taught by Professor Kitt during the Spring '08 term at University of Texas at Austin.

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Financial Planning Basics _3 - Students - 1 Budgeting /...

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