Introduction to Spending Plans Answer Key

Page | 1 1.2.4.C1 Introduction to Spending Plans Answer Key Introduction to Spending Plans Note Taking Guide 1.2.4.L1: What is a spending plan? A tool used to help manage spending Have you ever used one? Answers will vary Why Use Spending Plans? 1. Track where money is going. 2. Identify Income and Expenses 3. Meet financial goals Term Income Expenses Net Gain Net Loss Definition Money Earned Money Spent Examples Job, Allowance, gifts, tips, interest etc. Housing, transportation, entertainment, giving, personal care, saving More Income than expenses More Expenses than Income Spending Plan Process Income & Expenses Examine your past records and receipts How to keep track. Time Frame Categories Put money into anticipate spending based on past spending & average percentage Keep records using cell phone, computer, saving receipts or paper/pen Examine to see if you overspent or over‐
estimated then adjust spending plan
What is the goal of a spending plan?  Answers may include: To not overspend, To reach goals, To live within your means and to be happy. Jane has a: Net Gain  What could be done? She could place money into savings, pay debt or meet other goals Doug has a: Net Loss  What could be done? Adjust his spending or increase his income. A Spending Plan Includes:  Income Examples: Jobs, tips, scholarships, gifts  Expenses Examples: Saving, Housing, Transportation, Food, Utilities, Taxes, Insurance, Other © Take Charge Today – November 2014 – Introduction to Spending Plans Answer Key – Page 1 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona Page | 2 1.2.4.C1 Spending Plans 101 worksheet 1.2.4.A2: 1. C 2. D 3. B 4. E 5. A 6. A spending plan is a financial statement individuals can use to assist with money management. 7. The benefits of creating a spending plan include giving a person an understanding of where their money is going, tracking income and expenses, helping a person to meet financial goals, and helping people live within their income. 8. Housing, transportation, food, insurance, utilities, clothing, savings and other. It is necessary to make a list of all expenses in order to create an accurate spending plan and manage money effectively. 9. – 12. paycheck, winning the lottery, putting money into a piggy bank, birthday money 13. – 16. rent/house payment, groceries, internet bill, utilities, hobbies, car repairs, clothes, using savings to buy a skateboard © Take Charge Today – November 2014 – Introduction to Spending Plans Answer Key – Page 2 Funded by a grant from Take Charge America, Inc. to the Norton School of Family and Consumer Sciences Take Charge America Institute at The University of Arizona