10/20 Week 4
Review of last class – psychology of budgeting…
Directions: There are many online products to help you with tracking your spending and budgeting your money. But which one is the best? Please work with a partner to research online budgeting software. Complete the graphic organizer below.
HINT: An easy way to find the info to learn about these apps is using the “nerdwallet” link below, or just google-search the info. You’ll often find out that other people have done some of the work for you.
Do you know of/can you recommend some other apps?
Product 1: Mint: https://www.mint.com/
|Brief Description of Software: see
|Pros: Automatically syncing the spendings, Can be glitchy||Cons: Must link bank account|
Group – it is still a good choice,
Cool feature of giving alarm when hitting a certain preset maximum spending threshold
Product 2: You Need A Budget: https://www.youneedabudget.com/
|Brief Description of Software||Cost: Free trial , but after $12 months it cost 12/month|
Product 3: BudgetSimple: https://www.budgetsimple.com/
|Brief Description of Software||Cost: DK|
|Pros:||Cons: no longer in use|
Website has deleted the data. It is no longer in service.
“They’re not kidding when they’re saying it’s simple, it so simple you can’t do anything with it”
Product 4: Money Point:
|Brief Description of Software:||Cost: Free|
|Pros: Existing data can be imported quickly. No need to sync to bank.||Cons: no mobile version/app, any/all data must be entered manually.|
Sadira likes it 🙂
|Brief Description of Software||Cost:|
Your Reaction: Please answer each question honestly:
1.What are some advantages of using budgeting software to help you track your money?
2What are some disadvantages of using budgeting software to help you track your money?
3.Would you use budgeting software to help you track your money?
4. Today, you researched several budgeting software applications. Which one did you like best? Why?
Review from last class 50/30/20 and want’s vs needs
Psychology of BUDGETING.
Article: The Secret to Budgeting Successfully, From Jeremy Vohwinkle
It’s All in the Attitude, Dude!
Have you ever attempted to budget and given up in frustration or discouragement? If you can figure out the reason your budgeting attempt failed, you’ll be able to institute a rewarding, successful budget and stick to it. Think about it. What really determines whether budgeting works for you?
One of the top reasons, if not THE top reason, so many people fail at budgeting is attitude. If you think of it as a penny-pinching sacrifice instead of a means for achieving your financial goals and dreams, how long are you likely to stick with it? It’s like the difference between going on a diet and eating healthily. One is negative and restrictive; the other is positive and allows you to indulge now and then and still achieve your goals.
To increase your chances of success, work on your attitude first.
Many people refuse to budget because of budgeting’s negative connotation. If you’re one of them, try thinking of it as a “spending plan” instead of a “budget.” Once you’ve attempted to budget and failed, the bad feelings associated with any type of failure can keep you from trying again. Don’t give up!
Why does budgeting matter? Money is a tool that enables you to reach your goals in life, but until you know where your money goes, you can’t make conscious decisions about how to use this tool effectively. A budget shows you exactly where your money goes and provides a spending plan that lets you save for the things that are important to you: a new house, a new car, a comfortable retirement, a college education, travel, or whatever your particular goals and dreams happen to be.
There are several universal budgeting concepts that every successful budget will include, but one of the most important features of a successful budget is customization to your needs. Don’t try to force your lifestyle and personal situation into a generic, one-size-fits-all budget. If a simpler approach makes it easier to stay committed, then go for simplicity. If you stick with a realistic, effective budget long enough, the rewards will keep you motivated; in the meantime, do whatever it takes to keep yourself going.
One important aspect of a successful, long-term relationship is working towards common goals, and a budget is a means of achieving them. Couples who can’t come to an agreement about savings towards common goals should sit down and talk calmly and rationally and come to a compromise to resolve this disconnect in their relationship.
It’s okay to have individual goals that the other person doesn’t share, and to provide for a way for those goals to be met, but it’s critical to have basic common financial goals that both people in the relationship agree to and are motivated to work towards. If you can’t agree about saving towards those goals, you’re going to be at cross-purposes that are going to be a cause of ongoing conflict. A budget centered around conflict and resentment is a budget doomed for failure.
If you still can’t figure out why your budget isn’t working, consider the psychological factors at work. What does money mean to you? Do you use it for reasons other than its obvious purpose? Do you use it as a self-esteem booster, to make yourself feel worthwhile? Do you enjoy the heady rush of making a new purchase? Do you use it as a sign of power or control in a relationship?
There are a number of good books about the psychological aspects of money that can help you spot these factors and help you work with them. See The Psychology of Spending Money.
If you jump into budgeting without a positive attitude about it, chances are high that you’ll give up before you’ve seen the difference a budget or spending plan can make in your life. The secret is to work on your attitude first.
Directions: Please answer the following questions:
- How does your attitude affect your budget?
- Does calling a budget a spending plan help? Why or why not?
- Why does budgeting matter?
- The article suggests that a successful budget will be customized to fit your needs. What does this mean?
- Does having a goal help your budget? Why?
Students shared a recent purchase and decided if it was a want or need. Sometimes it’s both.
Want – don’t need but improves your life, would be a minor inconvenience if you didn’t have it
Need – Something you can’t live without or would greatly inconvenience you
Watch the video below to find out more about the 50, 30, 20 %-rule:
Work on Assignment: Want vs Needs (where does it go?) and Questions for the 50, 30, 20 rule.
What is the difference between Gross vs Net income.? Gross is pre tax and net is after tax
What is the 50, 30 20 rule? multiple choice : A specific budget , and idea of what % of your income you should spend on expenses?
What % should you spend on WANTS? 20, 30, or 50.
List at least 3 examples of “spendings” that go into each category:
What category will these “spendings” go into?
Video-game, rent, birthday gift for family member, music concert, retirement, cellphone, vacation, electric bill, emergencies, date-night, …..
Next week we will practice the math of the 20/30/50 rule. For students in advance budgeting please have online banking or your banking app installed. Please have your passwords, but you will not share personal financial information.
First day of class and we shared what we like to spend money on.
The groups were split in two depending on income and budgeting level.
Real Life Budgeting:
We shared our jobs, income and bills we pay.
Students then talked about the topics they want to learn about:
Online banking, paying bills online, avoiding bank fees, bouncing a check, how to write a check, credit vs, debit, credit scores, and students thought about what larger item they would like to save for.