Consumer Math Chapter 3 Average Monthly Expenditure

Budget sheey

-A way of keeping track of your monthly expenses -Outlines your total monthly expenses

Expense Summary

-Compares amount spent to the amount budgeted. -Answers the question: Did you spend more or less than you planned? -Calculates the difference between what was budgeted and what was spent.

Recordkeeping

A way to manage your money

Fixed Expenses

Do not vary from month to month such as car payments, mortgage, and fixed budget utility plans

Emergency Fund

Extra money put aside for unexpected expenses-such as a car accident or property damage due to weather.

Expenditures

Items you spend your money on

What is the first step toward making sure that you are living within your means-not spending more than you can afford?

Keeping track of what you spend

Annual Expenses

Paid once a year such as taxes or insurance but you need to set aside money each month to cover the cost of these

How to Use a Budget

Step 1) Take the larger number and subtract the smaller number. Step 2) If the amount budgeted is larger, you spent less. If the amount spent is larger, you spent more.

How to calculate Monthly Expenses

Step 1) Total Monthly living expenses. Step 2) Total Monthly fixed expenses. Step 3) Total annual expenses. Divide this number by 12 to get the monthly share. Step 4) Monthly Living Expenses + Monthly Fixed Expenses + Monthly share of Annual Expenses

How to calculate Average Monthly Expenditure

Step 1) Total each month's expenses. Step 2) Total all monthly expenditures. Step 3) Divide by the number of months to get Average Monthly Expenditure.

Living expenses

Vary from month to month, includes food, utility bills, entertainment, pocket (spending) money