Budget Basics
This is a plan for how you spend and save money
Budget
Something required to live
Need
Pay before taxes
Gross Pay
% for needs
50%
Required payment to government
Taxes
Money coming in
Income
Something nice but not necessary
Want
Pay after deductions
Net Pay
% for wants
30%
Tax based on income
Federal income tax
Money going out
Expenses
Example of a need
Money taken out
Deduction
% for savings
20%
Who pays taxes
People who earn income
Why budgets are important?
They help manage money/track spending
Example of a want
Shoes, snacks, phone
Pay Stub
What the 20% is used for
Savings
Why we pay taxes
To fund governemnt programs
What a budget includes
Income and expenses
Question to ask yourself
Can I live without this?
Why net pay is used for budgeting
It's the actual take-home money
Why this rule is helpful
Helps balance spending and saving
One type of government spending
Mandatory, discretionary, or interest on debt