Personal Finance Budgeting Review Part 2
Creating financial goals helps you determine your priorities, needs, and wants. This allows you to better proportion your available funds and create a more focused budget that is tailored towards your goals.
Explain how setting a financial goal(s) can help you create a budget.
Fixed -Rent -Student Loans -Car Payment Variable -Groceries -Electric Bill (if you don't have an Equal Pay plan) -Entertainment -Dining out Unexpected -Car Maintenance -Hospital Bill -Unemployment
Give one example of each of the following types of expense: Fixed Variable Unexpected (Whammy!)
By calculating unit price, you are able to strip away the influence of brands and strangely sized items and focus solely on the price of similar products. For example, you can compare two different sizes of cereal on a per unit basis to effectively determine which one is cheaper by ounce or gram. Some challenges you may face when calculating unit price are: -There is currently no standard unit price measurement -Some items might be priced in different units, such as pounds, ounces, or grams -There is currently no standard unit price label that all stores must use. All of these factors can make it much more difficult to quickly and easily compare unit prices of similar products
How can unit pricing help you save money on groceries? Describe one challenge you may face when calculating the unit price of an item in the store.
Pros -You get to set your own hours and work location -You get to choose who you work for -You have the freedom to work on projects that interest you Cons -You are responsible for your own health insurance, taxes and retirement -Work is not guaranteed -You commonly have to pay expenses for transportation and equipment
List one pro and one con of being a freelancer or independent contractor in the gig economy?
A budget is a simple yet powerful tool that allows you to keep track of the money you have and where it is going. Keeping a budget can help you work towards and achieve your financial goals. Steps can include: -Track your expenses as you go through the month, not at the end of the month, to see how closely you're sticking to your budget. -Create a monthly budget and regularly evaluate how realistic it is - are you consistently under/overspending in any categories? Make any modifications based on what you observe. If you experience a life change (you move, get married, have a child, etc.) make sure you revisit your budget so that it reflects these changes.
What role does a budget play in managing your personal finances? What steps can you take over time to make sure that your budget works for you?
