3+Budgeting+&+Banking

= Budgeting = media type="youtube" key="6LhyWtjLvME" width="560" height="315" you actually don't have to be an EXTREME cheapskate...

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media type="youtube" key="gJu7ORAp8Ck" width="560" height="315" A budget is a plan for your future income and expenditures that you can use as a guideline for spending and saving.

Although many Americans already use a budget to plan their spending, the majority of Americans also routinely spend more than they can afford.

//**The key to spending within your means is to know your expenses and to spend less than you make.**//

A good monthly budget can help ensure you pay your bills on time, have funds to cover unexpected emergencies and reach your financial goals.

Most of the information you need is already at your fingertips. To create or rework your budget, follow the simple steps outlined below to get a clear picture of your monthly finances. You can also use our free online budgeting calculators below to budget for certain specific purchases or events.

1. Add Up Your Income
To set a monthly budget, you first need to determine how much income you have. Using the worksheet at the bottom of this page, write a dollar figure next to each relevant income source. Make sure you include all sources of income such as salaries, interest, pension and any other income–including a spouse's income if you're married.

If you get a salary, be sure to use your take-home pay rather than your gross pay. Taxes are usually taken out automatically, but if they're not, remember to include them as another expense. If you receive money from somewhere not listed, enter the source along with the amount under "other income."

2. Estimate Expenses
The best way to do this is to keep track of how much you spend for one month. The worksheet below divides spending into fixed and flexible expenses. Fixed expenses are those that generally do not change from month to month, such as rent and insurance payments. Flexible expenses are those that do change from month to month, such as food or entertainment. If some of your expenses for one or more categories change significantly each month, take a three-month average for your total.

3. Figure Out The Difference
Once you've totaled up your monthly income and your monthly expenses, subtract the expense total from the income total to get the difference. A positive number indicates that you're spending less than you earn--congratulations. A negative number indicates that your expenses are greater than your income. This means you will need to trim your expenses in order to begin living within your means.

Well done–you've created a budget. The next step is to track your budget over time to make sure you're sticking to it. If you find you aren't able to follow your budget successfully, it may mean that your plan isn't flexible enough. It can take revisiting your budget a few times to find the balance that works for you.

Federal Withholding Tables


**Budget Assignment 1** Use the spreadsheet template to create a budget for Vanessa

Vanessa's monthly gross salary is 2,533
 * Federal, State, FICA, and Medicare taxes
 * Vanessa is single and claims one allowance
 * Savings of $300
 * Rent $600
 * Car Payment $250
 * Internet $35
 * Car Insurance $30
 * Utilities
 * Phone
 * Groceries
 * Entertainment
 * Healthy/Beauty
 * Clothing
 * Gas

Complete a **monthly** budget spreadsheet for Vanessa.

Then create a pie chart which shows Vanessa's expenditures (Taxes, Fixed, Variable, Savings) with all of the pieces labeled that looks a bit like this:



**Budget Assignment 2** Use the spreadsheet template to create a **monthly** budget for an Average Oregon Family



Average Oregonian's median salary: $49,260 per year (half of Oregonians earn less and half earn more)
 * Federal, State, FICA, and Medicare taxes
 * $200 to 401(k) retirement
 * $100 Savings
 * $1,000 House payment
 * $250 Car payment
 * $150 Property taxes/homeowner's insurance
 * $400 Food
 * $75 Heat
 * $60 Electricity
 * $75 Water, Sewer, Garbage
 * $50 Phone
 * $100 Car Insurance
 * $100 Gasoline
 * $150 Medical
 * $75 Entertainment
 * $80 Charity
 * Clothing
 * Health & Beauty

Complete a **monthly** budget spreadsheet for the average Oregonian. Then create a pie chart which shows their expenditures (Taxes, Fixed, Variable, Savings)

Budget Assignment 3
Create an Excel spreadsheet with a personal budget. Let's make the following assumptions...


 * 1) Remember the career that you did a report on at the beginning of the year? Let's assume that you've landed an entry level job in this career!
 * 2) Research the Occupational Outlook Handbook click on "Index" and find your occupation
 * 3) Find out the entry-level salary for your occupation
 * 4) Research the level of education necessary for your occupation (how many years of college/trade/tech school, etc?)
 * 5) Use the Sample Budget spreadsheet as a template for your budget
 * 6) Include at least these budget items:
 * Gross income
 * Federal, State, FICA, and Medicare taxes
 * 5% of gross to 401(k) retirement
 * Savings
 * House/rent payment
 * Car payment (or some kind of transportation)
 * Car insurance (if you own a car)
 * Gasoline (if you own a car)
 * Property taxes/homeowner's insurance (if you own a home)
 * Food
 * Heat
 * Electricity
 * Water, Sewer, Garbage
 * Phone
 * Medical
 * Entertainment
 * Charity
 * Clothing
 * Health & Beauty
 * For student loan payment:
 * Determine how many years of college you will need for your occupation
 * Find out what institution you could attend and how much it costs to attend for your degree/certificate
 * 1) Use CIS to find schools that have your program
 * 2) Username Griswold, Password grizzlies
 * 3) Under the Education tab, try the School Sort
 * 4) Enter your criteria, especially the Academic Areas of Study
 * 5) Pick the Major Cluster or Individual Major that suits you
 * 6) You will be able to find the tuition/expenses for one year
 * 7) Multiply the cost per year by how many years are required to complete the training
 * 8) Divide by 2 (we're assuming you could pay 1/2 the expenses yourself--scholarships, jobs, parents--and take out loans to cover the other 1/2)
 * 9) With the amount that you would have to borrow determined, use this student loan repayment calculator to find your monthly payment
 * 10) Assume a 10 year repayment period with a loan at 3.76% (current rates for a government subsidized student loan)


 * 1) For rent/housing:
 * 2) The budgeted amount will be based on where you will live (where is there a job in your career area, and where do you see yourself living?)
 * 3) Use the internet (local newspaper ads or craigslist) to find costs for housing
 * 4) Hyperlink the title "Rent" to an online advertisement for the rental


 * 1) Format your spreadsheet (jazz it up so it looks pretty--while keeping it readable and professional)
 * 2) Delete rows on your spreadsheet that do not have amounts entered
 * 3) Create 3 pie charts
 * 4) All taxes
 * 5) All Fixed and Variable Expenses
 * 6) All **taxes, fixed and variable expenses**
 * 7) Title the charts
 * 8) Label the pieces, or include a legend
 * 9) Embed them near the worksheet.

All three budgets (Vanessa, Oregonian, Yours) should be in one Excel sheet, each on a separate tab. Send me the sheet.

=Bank Accounts =

Why have a checking account?


 * 1) FDIC
 * 2) Interest
 * 3) Direct Deposit on payday
 * 4) Debit Card
 * 5) Online Bill Pay (Standing Orders)
 * 6) Cash Checks
 * 7) Easier to Borrow $
 * 8) Get a Statement for Budgeting

Where to Open a Checking Account:

 * 1) Large Bank: US Bank Student Account
 * 2) Credit Union: Free Checking Account from First Community Credit Union
 * 3) Internet Bank: Banking from Ally



Checking Account Quiz

=Tips to Balancing Your Checkbook =









Use this Excel spreadsheet to help you balance a checkbook:





Reconciliation Exercise

 * 1) You are Joe Smith
 * 2) Write checks 6801-6805
 * 3) Create a deposit slip for the 3 deposits
 * 4) Record all transactions in the checkbook register; the opening balance is $500
 * 5) Check the bank statement; check off all the checks and deposits that have cleared the bank
 * 6) Complete a bank reconciliation for Joe
 * 7) Turn in the following
 * 8) Checks (25 pts)
 * 9) Deposit slips (10 pts)
 * 10) Checkbook register (30 pts)
 * 11) Reconciliation form (5 pts)

=Certificates of Deposit = media type="youtube" key="fB2Ui1HDX98" width="560" height="315" media type="youtube" key="-ESCRuQuGIY" width="560" height="315"
 * 1) Explain a situation in which a person would want to purchase a CD.
 * 2) Why would you earn a higher interest rate on a 5 year CD vs. a 1 year CD?
 * 3) What are three variations of CDs that you can find?
 * 4) List 3 advantages of CDs
 * 5) List 3 disadvantages of CDs
 * 6) What is CD Laddering?
 * 7) What is the best interest rate you can find on a 1 Year CD right now? Try Bankrate
 * 8) What bank offers the CD?
 * 9) What is the APR?
 * 10) How often is it compounded?
 * 11) What are the fees for opening this account?
 * 12) Is the CD insured? Who insures it?
 * 13) What are the penalties you would face if you withdrew your money before the CD matured?
 * 14) If you put $500 into this CD, how much would you have in 1 year? Use your compounding spreadsheet.
 * 15) Note that the APR is based on one year
 * 16) Note how often your CD would compound the interest
 * 17) 1 year = 365 days

=Compounding Interest =

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Here are some Compounding Interest Scenarios

Use this spreadsheet template to calculate the answers

=Contracts =