Your Budget Plan - 082 8281258

Estimating cash

In order to estimate available cash for saving or spending, you must keep track of both income and expenses (bank account statements and till slips) . A simple method of keeping track of cash would be to write down daily all cash earned and all cash spent. Keeping track of money you spend will give you the elements to include in your budget. You must determine what your total income and total expenses are and make a list of each over a period of at least one month.

Example, Wendy lives at home

 Wendy takes home R2000.00 a month from working at the Department of health. Her expenses for the month include: clothing account – R740.00, petrol for her car - R400.00, savings - R600.00. Wendy would keep track of her income and expenses in the following way:

Income:			Expenses:
Salary	R2000.00		Clothing	740.00
			Gas	400 .00
			Savings	600.00
			Miscellaneous	260.00
Total	R2000.00		Total	R2000.00

Set up budget for Sipho

You will set up a list of budget categories

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Look at this sample case:

Sipho is 25 years old and works in the computer center in a large city hospital. He has a college degree in computers and takes home R 12000 a month after taxes. He rents an apartment for R 3500 a month. He spends R2500 on food and R1000 for personal care. He has Medical aid at work, but he must pay R700 for car insurance. Sipho has a car payment of R 2000 a month. The upkeep on the car is R 400. He saves R1500 a month.

Sipho needs: 1. A new suit, Two new tyres

His wants are: 1. A disc player, A microwave

Two of his goals are: 1. To go to Cape Town on vacation and to take some management courses.

What categories does Sipho need and how much has he spent in these areas?

Categories Amount Spent

Make out a new budget for Sipho with the new categories and amounts included.

Date	Income	Food	Lights/water	Loans	Clothing	Recreation	Savings	Total

________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Activity 1: Answer the following questions:

1.       True or false: Discretionary spending pays for both fixed and variable expenses.____________

2.       Assets minus liabilities determine a person’s ___________.

3.       True or false: A liability has negative economic value.______________

4.       True or false: A diamond necklace is an example of an asset.______________

5.       If the net amount in your monthly budget is ___________, you may be living beyond your means.

6.       True or false: The main purpose of a budget is to slow down spending._______________

7.       Groceries are an example of a ___________ expense.

8.       Experts recommend saving at least what percentage of your income?_________________

9.       A household cash flow worksheet is a useful tool when building a ___________.

10.   By honestly evaluating your ___________ versus ___________, you can control excessive spending.

11.   Define budget .___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

12.   What must be done first in order to estimate available cash?

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

13.   What category should be included in all budgets?

__________________________________________________________________________________________________________________________________________________________________

14.   What three things does budgeting require?
__________________________________________________________________________________________________________________________________________________________________

________________________________________________________________________________

Activity 2: Complete a Personal Budget Worksheet:

		Income				Expenses	Comments
	Income:
	Your Primary Income
	Your Spouse's Income
	Child Support
	Disability Income
	Pension Income
	Other Income
	Total Income
	Necessary Expenses:
	Payroll Taxes
	Other income deductions
	Rent or Mortgage
	2nd Mortgage or Home Equity Loan
	Property Taxes
	Water
	Garbage
	Gas & Electric
	Auto Insurance
	Auto repairs
	Telephone (not mobile phone)
	Home Insurance
	Healthcare or Insurance Costs
	Life Insurance Costs
	Student Loans
	Home Repairs
	Laundry
	Childcare (daycare & babysitters)
	Child & Baby Expenses
	Other dependent expenses
	Total Necessary Expenses
	Discretionary Expenses:
	Credit Card Bills
	Vehicle  finance
	Petrol
	DSTV
	Mobile Phone (s)
	Home Improvement
	Home Security
	Garden Supplies
	Entertainment (not dining out)
	Dining Out
	Travel & Vacation
	Pets, Pet Care and Pet Food
	Clothing (above what's needed)
	Internet Access
	Gym membership
	Beer & Alcohol
	Cigarettes & Tobacco
	Total

These clever tips help keep your cash where it belongs -- in your pocket!

Ø  Get organized: Gather all important financially-related documents to a central location that is equally accessible to both partners. 

Ø  Track you’re spending and pay yourself first: Write down where you are spending your money.  Re-route some of your spending to a savings account: pay yourself first for a secure financial future. 

Ø  Debit cards are handy tools to help work with your budget. At the end of the month, you’ll have a record of all the spending you’ve done with your debit card.

Ø  Credit cards can be very dangerous if you don’t have a budget. If you don’t know how much you can afford, how will you know if you overspend? Or, if you’re making a large purchase and paying it off over time, how will you know how long it will take to pay off, and how much interest you will pay?

Ø  Plan to save: Start a savings account to cover expenses like clothes, Christmas/holidays, and insurance.  Plan for future expenses throughout the year.  Complete a  retirement planning worksheet. 

Ø  Build an emergency fund: You never know when you will need additional cash so try to have two to three months of living expenses in a readily accessible savings account or money market account. 

Ø  Don’t Go Into Debt, and if you are, Get out of debt.  If you must use a credit card, control your credit card spending and try to pay off any debts you have (e.g., car, credit card, student loan, etc.).  Pay more than the minimum monthly payment.  Once you have paid off your debts/credit cards, take the money and put it towards savings or some other debt.  If possible, the goal is to simultaneously pay off your debt while still putting some amount into savings.  Remember, you are loaned money so that you will pay interest and late charges and make other people money. 

Ø  Set goals: Decide what you want to do with your money.  Do you want to pay off debts/student loans? Buy a house? Save for a new car or additional education?  Write down your goals and your strategy for achieving these goals.  Write a budget. 

Ø  Review your insurance coverage: Every year, review your health, life, disability, renter/homeowners, auto, and personal liability policies to make sure you are both adequately covered.

Ø  How much should you save and/or invest? Save at least 10% of every Rand you earn beginning with your first job.  The older you are the higher the percentage has to go unless you think you can work forever!

Ø  Try take-out once a month instead of dining out.

Ø  Rent a video instead of going to the movies.  If you really want to go to the movies, go to the less expensive afternoon “matinee.”

Ø  Or better yet, go to your local library and borrow books, CDs, videos, and read the latest magazines and newspapers.

Ø  Bring your lunch to work once or twice a week instead of buying it.

Ø  Don’t grocery shop on an empty stomach or you may end up buying more than you need.

Ø  Cut down food costs by buying what you need on sale, buying generic brands, buying in bulk, and shopping at discount outlets.

Ø  Don’t buy a sale item or use a coupon just for the sake of it being “cheaper.”  Buy an item only if you need it!  Shop with a list.

Ø  Increase your gas mileage by taking care of your car with schedule check-ups, or just drive less. Consider carpooling, walking, taking the bus or metro, or riding your bike.

Ø  Cancel your cable (or at least the premium channels), as well as subscriptions to magazines and newspapers.

Ø  Exercise at home rather than joining a gym.

Ø  Make your own coffee at home rather than buying from a store, or at least cut down the number of times per week you purchase coffee.

Ø  Track your spending and cash – know where every Rand goes!

Ø  Organize a friend/relative/neighbor swap of clothes, toys, furniture, CDs, etc.

Ø  Buy clothes for next year at the end-of-season sales – try garage sales and thrift stores.

Ø  Find a simple hairstyle that doesn’t cost too much to take care of on daily/weekly basis.

Ø  Take advantage of free entertainment in your community – parks, museums, exhibits, etc.  Go to free park concerts and other community activities.

Ø  Try to buy with cash, checks, or debit cards. If you use credit cards, get rid of all but one or two, and pay off the balance each month. You can save hundreds or thousands of Rands a year by avoiding credit card interest charges. 

Ø  Always do your grocery shopping with a list of items you need  -- and don't buy anything that's not on the list. You can save hundreds of Rands a year by avoiding impulse food purchases. 

Ø  Compare unit prices on labels when shopping (for example, price per ounce). You can save hundreds of Rands a year by purchasing items with the lowest price per unit. 

Ø  Avoid shopping at convenience stores. You pay for the convenience -- the prices are usually higher than grocery stores. 

Ø  When choosing a cell phone plan, find one that's appropriate for the calls you intend to make. For example, if you plan to use the phone only for emergencies, avoid plans with monthly fees or minimums. 

Ø  When your doctor prescribes a medicine, ask if a generic is available -- you'll pay less.

Ø  Before buying a car, compare insurance, maintenance, and repair costs for comparable models. You can save thousands of Rands over the life of the car by choosing a model

Ø   Keep Inventory :Near the pantry, create an inventory list so you know what items you have, as well as how much you paid per unit

Ø  Unplug Your Electronics : Unplug small appliances whenever you can. Computers, cell phone chargers, and other electronics often continue to use power -- and radiate heat -- even when turned off. To simplify, plug items into a power strip that you can use as a master switch.

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Money is not the ROOT to all EVIL !!!!!!  DEBT is