Dave:

0:01

imagine you've just been promoted to the title a money manager for a company

0:05

called new incorporated

0:07

your job is of course to manage the company's money

0:10

if you manage you incorporate its money the way you manage your own money now

0:14

well would you fire you don't answer that

0:18

you have to tell your money what to do where it will leave you

0:21

go to someone else a written budget

0:24

for the month is your money go people who win it elite they have written goals

0:29

goals are what you are aiming at

0:33

the executor says if you aim at nothing you're headed every time

0:37

your money will behave unless you tame it your budget is the

0:41

it's the weapon the chair church makes the money behave

0:44

yet to be intentional with it you can't get your head

0:47

became you can operate with your head in the saint you know you wouldn't build a

0:51

house without blueprint so

0:52

why do you spend your life take the time income of over two million dollars

0:56

without a plan

0:56

well there's too much month left at the end of your money well it's because your

1:00

budget doesn't exist or is it working

1:02

a study at Harvard graduates found that after two years 3 percent who had

1:06

written goals

1:07

achieve more financially than the other ninety seven percent combined

1:11

gotta do it on paper on purpose before the month begins

1:14

your budget is a written goal for your money you need to set up a budget

1:19

every single month don't try to have the perfect budget plan the perfect month

1:23

from heaven

1:23

because you never get one of those spend every dollar on paper before the month

1:27

begins give every dollar a beer income a name before the month begins

1:30

this is called zero-based budgeting income minus outgoing calls exactly zero

1:36

every month look at this month's income at this month's bills

1:40

savings and debt and match them up until you've given every income dollar

1:45

and outgo name if you have a regular income because you're in sales

1:49

or you own your own business or something like that well so we have a

1:52

planning sheet for you

1:54

in the total Money Makeover workbook and if you get paid on commission or

1:58

something but I like us to that works for every bit of that

2:00

call the irregular income planning sheet you still must do a written budget

2:04

before the month begins

2:05

no one gets out you gotta manage money for you incorporated if you're married

2:09

you and your spouse need to agree on it

2:11

and well sometimes that's the hardest part if you're working together it's

2:15

almost impossible to win

2:17

if something comes up in the middle the month that causes the budget need

2:20

changing

2:20

call emergency Budget Committee meeting

2:23

you incorporated we're gonna have a meeting talk it through a just what

2:27

needs to adjust the Wall Street Journal reports that more than

2:29

seventy percent of Americans living paycheck to paycheck so you got a break

2:33

the cycle

2:33

change your family tree live on less than you make save for rainy days

2:38

live like no one else or later you can live like no one else

https://www.youtube.com/watch?v=VzfhKEMWuCY&feature=player_embedded

Lisa:

0:00

I love two-part 30 my college transition series at this time how to make a budget

0:05

of

0:08

now I'm know when you hear the word budget you probably have won a few

0:12

reactions

0:13

all I look you don't tell me making a budget

0:24

freakiness sucks but you gotta do it I'm gonna show you how can be very easy

0:29

you'll thank yourself later and it will be a huge help down the road

0:32

so the first step is decide whether or not want to involve your parents

0:36

I know there's a lot of different kinds apparent out there some are very

0:38

overbearing or very overprotective

0:41

or just wanna be involved in your life others are kinda stand offish

0:45

I'm and maybe you don't have a great relationship with your parents so if you

0:48

have here is that are kinda stand offish let you do your own thing I'm and

0:51

they're not paying for any kind of your school or give you any money

0:54

each maybe this is something that you want you on your route but otherwise and

0:58

especially if your parents are giving you any money towards college

1:01

you can really be a big help here because chances are he's probably done

1:05

but it's on their own at some point in their life

1:07

I'm and like I said if they're giving you money towards your college education

1:11

involving them in this budget making process can be a big help

1:14

step two is to start a table and you can I did you decide computer just

1:17

of fashion pen and paper and you should keep elected by

1:20

budgets I'm but because you're in school and you're paying tuition

1:25

either TKTS a masterly chunks or your only chance

1:28

will include semester and here's your Q and for each in those different

1:32

categories are gonna have two different columns

1:34

one of those columns is what your budget is or what you're planning on earning

1:39

more spendy

1:39

and the second column you're gonna record as you go throughout the school

1:42

year and that's what you

1:43

actually enough earning and spending step three is to write down all your

1:47

income and that includes income you might have crummy jobs from your parents

1:51

from student loans

1:53

scholarships financial aid any sort of miscellaneous

1:56

income you might have like if you have a savings account that you're planning on

2:00

using torrents college

2:01

or if you receive any money for your high school graduation

2:04

or clean I'm receiving any other sort %uh guess so now I'm not up to see the

2:09

total amount of money you'll have to spend

2:12

for the month for this semester and for the year or if you just wanna get

2:15

wanna categories easiest for you that's thank you

2:19

now you have that total step 4: is going to be out all under

2:22

6 and necessary expenses even think that you'll have to buy

2:27

and that will pretty much always costs the same about

2:30

like your tuition and fees your room and board if you live on campus

2:34

or your rent utilities if you live off campus books

2:37

a car loan if you have one any car insurance or health insurance you might

2:41

have to pay

2:42

and a cell phone bill if you have that so now again you're going to at all

2:46

these numbers

2:46

up whether it's in all three categories monthly specially in yearly

2:50

or whether you decide to pick the one that easiest for you you don't wanna

2:54

at all up so that you know how much money you have to spend

2:58

step 5: venice is a track Alamgir necessary expenses from your total

3:02

income

3:02

and that number that you have leftover is going to be your disposable income

3:06

that means money like to spend on things that you'd like to buy

3:10

but the necessity of those things in the area as well as how much those things

3:14

are going to cost so I'm just

3:15

you some numbers here for the second example let's say that between your mom

3:19

scholarship parents and your job

3:21

you're gonna be making twenty thousand dollars this year and between your

3:24

tuition room and board

3:26

books and any other necessary fees you're gonna be spending

3:29

fifteen thousand dollars this means you house I thousand dollars left over as

3:33

disposable income which I will explain and will do little bit more work that

3:37

second one thing that I do want to point out though is that this remaining number

3:40

should definitely not be zero-emission

3:42

absolutely not be naked and that's because you still do have some expenses

3:47

that you're going to need to cover

3:49

so if this number is zero or if it's negative that means you don't have

3:52

enough money

3:53

and you need to either get more money from your parents find a job that will

3:57

pay you better

3:58

I'm or take out more student loan money so that you can cover at the recipe

4:02

recipes because

4:04

while student loan debt is not ideal it's certainly a better option in credit

4:08

card debt

4:08

so now I'm going to take this disposable income and if I got

4:12

into categories this is going to include in some cases things that you do need to

4:16

buy but the price really

4:17

a race like groceries I'm and in other cases things that maybe you just really

4:21

want to buy more than you need to buy

4:23

so that is going to include things like groceries

4:26

hygiene products like shampoos so and laundry

4:30

me gas that you'll need for your car recreational activities and finally

4:35

eating out going to movies buying video games that sort of thing

4:38

and then any miscellaneous things like clothes shopping

4:42

I'm whatever else you might like to do this is a section on the chart we're

4:45

going to need to prioritize for example you need groceries more than you need to

4:49

go shopping or me to fight video games

4:51

so if you're running low on money here your grocery shitty a higher priority

4:56

than any of the other things yeah nice thing about this section up the budget

4:59

is that it can be really flexible so

5:01

as you go throughout the year if you realize maybe you're spending too much

5:05

money on groceries and you can spend a little less

5:07

to leave you some money left over for the fun things you can adjust the budget

5:11

as a goal of but again the number you have leftover after all this should not

5:15

be 0 and that's because life is full of all sorts of unforeseen things

5:19

whether that's I'm something bad like an unforeseen car accident or medical bill

5:24

or whether it's something fun like Sutton spring break trip comes up that

5:28

you wanna go on

5:29

if this number is 0 that means your gonna be s.o.l because you don't have

5:32

any money left over to cover those things

5:34

so make sure you yourself a little money for on cases emergencies

5:39

and then also it would be ideal if you can put a little money into savings as

5:42

well

5:43

an hour on a subject is money I just wanna make one quick note on the topic a

5:46

student loans and that is

5:48

when it comes to your student loans I think there's a couple different routes

5:52

you can take

5:52

one is that you can take out a ton of student loan money

5:56

and you can live their lavishly spending away all your student loan money on

6:00

candy going out to eat

6:02

video games going on dates and the other option

6:05

or the other extreme is that you can takeout

6:08

little to no student loan money and live basically an impoverished lifestyle for

6:12

all college

6:14

and then the third national be somewhere in the middle if it were me I would tend

6:17

to take them in or out because well I am a big proponent that life should be fine

6:21

in some cases you need money for that I'm also a big proponent

6:25

you should never go into debt especially unnecessary

6:29

that now the problem student loans is that they're just loans they're not

6:32

guess

6:33

you're gonna have to pay that money back at some point and right now it's coming

6:37

with the price tax

6:38

up 3.4 percent and depending on what happens in congress over these next few

6:42

weeks

6:43

that rate could actually double up to nearly 7 percent

6:46

so each time you are spending less than a hundred dollars your actually spending

6:50

much more

6:51

because about extra added interest rates and many people often end up paying off

6:55

their student loans well into their 30s 40s and 50s so

6:59

think about that and think about the fact that you probably won't be wanting

7:02

to still

7:03

payoff be paying off your student loans when you're in your thirties forties

7:06

maybe are married maybe have kids you're not gonna be wanting to still have to

7:10

pay off your student loan so take that into consideration now and then decide

7:15

how much money you really need to take out so that occurs it on the topic a

7:18

budget as always analyst me a little complicated so feel free to you

https://www.youtube.com/watch?v=Nu521bJGtZI&feature=player_embedded

After watching these videos answer the following questions:

1. In the first video, Dave Ramsey discusses the importance of setting goals. In the second video, Lisa Ferguson talks about priorities. What commom message are both of these individuals trying to get across to the listener?

2. Lisa Ferguson gives some examples of how people might react to the term "Budget". What are your feelings or reactions towards budgets? Do you use a budget--why or why not?

3. In your opinion, what would be the advantages of using a budget?

3. What are some behaviorial challenges You, personally, may face in "sticking to a budget"?

4. Both videos discuss the need to be flexible when using budgets. Explain.