Discount stores Read the reviews of the online stores too! Customer service, refund and return policies Read advertisements Look for coupons or coupon books When buying items that come in units, compare unit cost Example 3 groceries (per pound, per ounce, per liter, etc.) Make sure your comparisons are like-in-kind Example 3 Computer prices may be package deals including monitor, others do not Sometimes similar or same products are sold under different brand names or model numbers Brand name items may have higher price since you 9re paying for the advertising Name brands are often made in the same factory as generic 4 Consider Alternatives Examples: video games, DVDs, books (library) Wait 3 many things fall in price after they 9ve been on the market a short while Build it yourself 3 save money through kits Example: Battery charger for iPods Bu used items eBay, Amazon.com used items, B&N used books Returned or opened merchandise Outlets (factory seconds with full warranties) Overstocks Impulse Buying Marketers are experts in separating you from your money Impulse buyin (somethin that you didn 9t plan) is a ood way to spend a lot more than you expected.<br><br> Stores are arranged to promote impulse shopping Grocery stores 3 milk, bread typically at the back of the store Items placed at eye level will sell more Lots of small, high mark up items at the checkout Sale items at the entrance cLoss Leaders d get you into the store to buy other items at regular prices cBait and Switch d 3 steer you to a higher priced alternative Need to understand the moods and feelings that can affect buying decisions 9 Make a list (a shopping plan) and stick to it People sometimes buy to make them feel better Envy shopping (keeping up with someone else) Name brand status 5 Major Expense Exercise 3 Requirement 1 Do the following: Choose an item that your family might want to purchase that is considered a major expense. Write a plan that tells how your family would save money for the purchase identified in requirement 1a. Discuss the plan with your merit badge counselor Discuss the plan with your family Discuss how other family needs must be considered in this plan.<br><br> Develop a written shopping strategy for the purchase identified in requirement 1a. Determine the quality of the item or service (using consumer publications or rating systems). Comparison shop for the item.<br><br> Find out where you can buy the item for the best price. (Provide prices from at least two different price sources.) Call around; study ads. Look for a sale or discount coupon.<br><br> Consider alternatives. Can you buy the item used? Should you wait for a sale?<br><br> Worksheet Go through instructions on worksheet Expectations Fully filled out ( cwritten plan d) When discussed with family Include a summary of your comparison shopping (advertisements, web sites visited, etc.) Alternatives considered Major Expense Exercise 3 Requirement 1 Go through instructions on worksheet Expectations Fully filled out ( cwritten plan d) When discussed with family Include a summary of your comparison shopping (advertisements, web sites visited, etc.) Alternatives considered 6 Budgets Preparing a Personal Budget 3 reflecting your expected income (allowance, gifts, wages), expenses, and savings. Track your actual income, expenses, and savings for 13 consecutive weeks. 7 What is a Budget?<br><br> expected and actual income and expenses. Personal Budgets Remember, the goal is to manage our money 3 in order to do so means that we have to organize information so we can make informed decisions What sort of decisions, you ask? Saving for a specific goal (e.g.<br><br> buying a new computer game) Saving for a long term goal (e.g. going to college) Investing for the future? (e.g.<br><br> a house, retirement) Affording current wants (e.g. movie and dinner with your buddies) Preparing a budget is the important first step in money management. To really understand the cwhy d of preparing a budget, think in terms of our oa s.<br><br> e s es or o one ana e en s o oo n our wallet 3 if you have enough money, you can afford something, if you don 9t, you can 9t Most of us want to plan ahead, so we set goals such as those above Once we set the goals, we translate those into action A budget allows us to attain the financial goals we set. 8 Basics of Budgeting Determine income Determine expected expenses, considering our goals with expenses. Budget Exercise process there is a Budget Preparation Exercise that will walk you through the entire budget process.<br><br> This will fulfill merit badge requirement #2 9 Budget Exercise If you don 9t have a plan you will definitely end up somewhere, but most likely not where you want to be. The first step in making a plan is setting your goals. We 9ll do this using Worksheet 1.<br><br> Everyone should have some short term and long term goals Examples of goals (savings for: summer camp, gifts, game, x- box, college, car, etc) ou e wor s ee you can nc u e non-spec c sav n s Savings note: even if you 9re not saving for anything specific, it 9s a good idea to set aside at least 10% of your income for savings. This is reflected in the crainy day d savings line at the bottom of the worksheet. Budget Exercise In order to complete Requirement 2, you need to have some type of income.<br><br> List your anticipated income for the month ahead; again, you 9ll be filling out three of these durin this worksho . Examples: allowance, job, gifts Be sure to list ALL of your projected income for the month ahead 10 Budget Exercise List your expected expenses for the month ahead. You 9ll be filling out three of these during this workshop, one for each of the next three months.<br><br> You can lum ex enses into cate ories such as entertainment, snacks, CDs, etc. Try to think of everything that you 9ll spend money for during the course of the month. Budget Exercise Insert the savings goal from Worksheet 1; this is the amount that you will have to save to meet your savings goals, both long and short term.<br><br> Insert your projected expenses from Worksheet 3 Add these together 3 this is how much you 9ll have to have as income to meet your goal. At the bottom fill in your expected income The income should match the ex enses lus savin s oal. So, if your plan does not balance, you will have to ad ust your plan.<br><br> You cannot start the month planning to spend more than you bring in. If expenses exceed income you can increase income or decrease expenses 11 Tips for increasing income allowance. Offer to do more chores.<br><br> Get a part time job. Work your own business (mowing lawns, runnin errands for people, teaching, etc). Sell things you don 9t want or need.<br><br> Tips for decreasing expenses 9 cneed d or a cwant d You need food; you may want a soda, but certainly don 9t need it Examples of things that people think the need, but really don 9t: cell phones, cable TV, magazine/newspaper subscriptions, high speed internet, snacks and sodas, entertainment electronics, computer games, new CDs & books, expensive clothing, etc. 12 Budget Exercise Expenses Now it 9s time to track your actual income and expenses Start with your current cash 3 balance or income item Extra pages can be downloaded from the website Budget Exercise 3 for the Month At the end of the month, you reconcile your budget and fill out Worksheet 6 You can adjust your plan as the month oes on for unexpected chan es, but make every effort to stick to the plan for expected income and expense. 13 Review of the Process At the be innin of the month ou create our bud et this is how much you expect to spend, how much you expect to make, and how much you expect to save.<br><br> During the month you record your income and expenses. At the end of the month you compare your plan to your actual data. If you 9re spending more than you make, you 9ll normally have to adjust your budget for the next month.<br><br> Use the information you 9ve gathered to put together your budget for the next month. 9 , month: your savings goals, an expected income sheet, an expected expenses sheet, a sheet of actual income and expenses, and a comparison of expected to actual. If you go through the Budget Preparation Exercise handouts you 9ll be doing each of these properly.<br><br> Summary While I 9ll cover most of the material in the workshop you should always read the book and do the exercises Very important to keep up For next week Fill out budget worksheets for review next week (not a good idea to start recording your daily expenses until I look at it m k r 9r in i rr l Begin work on major expense worksheet Readings (9 - 25) Suggest that you start on csavings versus investing d (p 31 3 39)

less