Mastering Budgeting: Essential Skills for Financial Success
School
Edison High, Edison**We aren't endorsed by this school
Course
FINANCE 215
Subject
Accounting
Date
Dec 10, 2024
Pages
3
Uploaded by BrigadierBison260
Budgeting BasicsStudent Activity PacketUNIT: BUDGETINGName:ARTICLE:What Is a Budget?(4 points)Now that you’ve had a chance to see the challenges of balancing all of the things that youwanted to do for Enzo with the needs of day to day life, let’s get back to basics and considerthe reasons that you would want to create a budget. Why is budgeting so important tofinancial success? Read the short article about the purpose of a budget. Then, answer thequestions.1: In your own words, explain why budgeting is important. Be sure to referenceat least one of the reasons from the article.VIDEO:Gross Pay vs. Net Pay: What's the Difference?(2 points)A vital part of creating a budget is understanding how much money you have available tobudget. You might think that’s as simple as multiplying your hourly wage by your totalhours worked–but that’s not the case. Watch this video about the difference betweengross and net pay. Then, answer the questions.1.When you are creating a budget, should you use your gross pay or netpay? Explain your reasoning.LEARN ITBudgeting is a way to keep track of your spending, and future planning for better financial future. This can also help you to save up for future spending like new car, house, etc. You should always use the net pay, because at the end of the day that the actual amount of money you will get, and will give you an accurate data to create your budget. You could use the gross pay, but it will take more to difference out the taxes and calculations.
VIDEO:Needs vs. Wants(2 points)The next thing you’ll need to do when creating a budget is to look at your expenses andfigure out which ones are needs and which ones are wants. Watch this video to learn aboutthe difference between needs and wants. Then, answer the questions.1.Carly makes the following statement: “Everyone should have the same listof needs.” Do you agree with this statement? Why or why not?2.Describe one example of something that might be a need for you but a want for someone else.ARTICLE:What’s the Difference Between Fixed and Variable Expenses?(4 points)When creating your budget, it’s important to realize that not all expenses are the same.There are actually two distinct types of expenses - fixed and variable. Read this article,stopping atBudgeting for Fixed and Variable Expenses, to learn about these types ofexpenses. Then, answer the questions.1.In your own words, explain the difference between a fixed expense and avariable expense.2.Categorize each of the following expenses into the correct group.a.Your cell phone billFixedVariableb.A restaurantFixedVariablec.Your Netflix subscriptionFixedVariabled.An emergency room billFixedVariablee.School suppliesFixedVariableNot really, because everyone has different scenarios in their community, like for ex. a homeless guy would need a house and clothes/food rather than a phone, car, or laptop. For me the decrease in gas prices might be a need because it always fluctuates which disrupts my weekly spending. Although this might be a want for someone who owns a car that needs premium gas. fixed expenses is where the price you are control by one specific amount, and variable expenses is where the item or product that is being purchased is the deciding factor for your expense.
ARTICLE:Popular Budgeting Strategies(8 points)There are many popular budgeting strategies. You get to decide which one works best foryou! Read the short article about four of the most popular budgeting strategies. Then,answer the questions.1.Briefly summarize 50/30/202.Pay Yourself First.3.Zero-based budgeting involves making sure every available dollar isaccounted for. How is this beneficial for someone using this method?4.How does envelope budgeting work?They are the percentage of your net income, where fifty percent goes to your needs, twenty percent goes to the savings, and thirty percent would go towards your wants.Put in a reasonable amount money to your savings first, after that pay your bills, and use the rest on how you like it. This will ensure that you will save more than spending. This strategy is to calculate your whole expense and keep track of every single dollar, to ensure a better budgeting for the week/month. I do not believe that this is beneficial because a small accident can disrupt the whole budget, and then you will have to recalculate the budget. It works by tracking your by different categories, like for ex. $500 of clothes were bought, $600 is your monthly car payment, $15 is your subscriptions. Overall keeping track of your money by using categories.