1. Financial
EmpowermentThe Business of
Budgeting
for the Family

2. What is Money
Management?
 Maintaining a budget
 Tracking your spending
 Controlling your spending
 Having positive cash flow
 Maximizing savings
 Utilizing your money efficiently

3. What they say
about budgets…
“A budget is restraining and limits my
freedom.”
“I cannot solve my money problems unless I
make more money.”
“Budgets are complicated and take too much
time.”

4. Think about this…
 We must understand all the aspects
that affect our money
Inflation
Money Management

5. What Kind of Message are
You Giving?
What do your spending habits say about how
you manage your money?
What do your spending habits teach your
children?
How often do you include the well-being of
your family when making financial decisions?

6. Youth
 Students perceive financial independence as
a means to achieve adult status. Although
some young adults in college learn to manage
their money well, many others overspend their
budgets, accrue credit card debt, and fail to
pay off debts on time.

7. 7 Reasons to Budget
i. Less stress
ii. Less reasons to argue over money
iii. Assure our financial stability
iv. Teach our children and family
v. Protect ourselves from our temptation to
spend
vi. Protect ourselves from unexpected
expenses, emergencies & unemployment
vii. Assure that our money grows

8. Let’s Rid Ourselves from the
“Budget”
 Invent your own name
Spending Plan
Money Plan
Etc.

9. First Step towards Money
Management?
 Attitude of Money
 Before making your plan you must
change your perception of money and
your approach to money management.

10. Emotion
 Money can affect us emotionally. When
we have money to spend are feelings
towards money are positive. When we don’t
have it to spend, our sentiments towards
money can be negative. This can lead a
person to make emotional decisions
rather then logical ones.

11. ‘
 Some times we try to keep up with Jones’
when in reality not even the Jones’ can
keep up with the lifestyle they lead. They
live an artificial life and we go through
leaps and bounds to mimic them.

12. 
 We have to acknowledge our weaknesses
and identify our temptations so we can
take them in account when we make a
budget or every time we’re in a situation
where that temptation exists.

13. Why become a business
owner?
 Achieve financial freedom
 Pursue personal and career interests

14. What is a business supposed
to do?
Earn money
Be a successful business
Grow and Expand
Increase revenue, increase production
Fulfill an Objective
Satisfy a need or want
Provide a service

15. You Are A Business
 Treat yourself as if you were a business
 A business as though every person with any
income has a cash flow
 Cash flow is constant movement – the
incomes and outcomes of your money

16. Cash Flow
 The difference between the inflows and
outflows of your money determine if you have
negative or positive cash flow
 It’s important because it measures your
capacity to save and arrive at your financial
objectives

17. Example
 A person that earns $3,000 a
month and spends $4,500 every
two months has a negative or
positive cash flow?
 Is this person in line with their
spending plan?

18. Money Management
 How do you differentiate money
management for the home and for a
business?

19. …As a Family
 Must find out how much it costs to “run” your
household
How can you really know if you are using
good money management if you don’t
track your expenses?

20. Putting it in Perspective
 Expense Ratio
Compares your total income with how much
you’ve spent for a specific expense.
What you paid = Expense Ratio
Your total income

21. Example
If you earn $45,000 per year and you
spend $120 per week for food what is your
expense ratio?
$6,240 ($120 X 52) per year.
Your Expense Ratio is…

22. Discover Your Net Worth

24. How to Money Proof Your
Family
Assure that the whole family participates
Take an honest look at your finances
Identify your weaknesses
Get organized
Assign a family member
Designate a place
Know your credit score and history
Distinguish between needs and wants
Form realistic goals

25. My Temptations List
Clothing
Jeans
Coats, Jackets
Books
Food
Brazilian & Haitian food
Chips & Soda
French Fries

26. An honest look at your
finances
 Do I have savings, and if so, how much?
 Has the percentage of my income to pay bills
increased?
 Do I max out my credit cards?
 Do you frequently miss payments?
 Do you use reserved funds to get caught up on
bills?

27.  …
 What types of purchases do you make with your
credit card? Could you use cash?
 Do you have a backup in case you lose your job?
 Do you know how much you owe?
 Do you know the interest on the debt you owe?
 Do you receive calls from creditors attempting to
get payment on a debt?

28. Organize Your Documents
Keep receipts for large purchases
Use your bills to help create your budget
Always keep documents that deal with home
repairs
Cross check your W-2 income with your check
stubs
Keep your tax returns for at least 6 years.

29. Medical receipts ((insurance payments,
prescriptions, etc.)) should be kept for at least
6 years.

30. Designate a Person
 Elect a member in your household to be the
“money manager”.

31. Designate a Place
 Find a secure and safe place in your home
to store financial documents.

32. Credit
Make sure you know your credit score or
are at least up to date with your report.
AnnualCreditReport.com

33. My Needs and
Wants
Needs Wants
Student Loans New Car
Money for Retirement Digital Camera
Cell phone Eating out
Clothing Europe trip
Cable TV Plasma TV
Healthcare $100 in savings

34. ActivityActivity
Priorities

35. What was the Objective of
the activity?
 Reduce debt
 Money management is required to reach
any financial goal
 Identify opportunities to spend

36.  Determine monthly income
 Calculate monthly expenses
 Subtract monthly expenses from
monthly income
Money Plan

37. Fix the Leaks in Your Money
Plan
☻Net Income vs. Gross Income
☻ATM fees
☻Not Comparison Shopping
☻Not comparison shopping…for better rates
☻Are you utilizing community resources?
☻How are you using credit?