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Ulrich's CD

The document outlines the fundamentals of personal finance, emphasizing the importance of budgeting, saving, and investing for financial control and stability. It presents various budgeting methods, tips for reducing debt, and strategies for successful investing. The conclusion encourages readers to start budgeting to achieve their financial goals.

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hanielangwi
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22 views13 pages

Ulrich's CD

The document outlines the fundamentals of personal finance, emphasizing the importance of budgeting, saving, and investing for financial control and stability. It presents various budgeting methods, tips for reducing debt, and strategies for successful investing. The conclusion encourages readers to start budgeting to achieve their financial goals.

Uploaded by

hanielangwi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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High school

Personal Budgeting
and Finance
Take control of your money
Objectives

● Understand the importance of personal


finance.

● Learn budgeting techniques for better


financial control.

● Discover tools and tips to save and


invest for the future.
What is personal finance?
Definition: Personal finance refers to the management of an individual's or
household’s financial activities, including income, expenses, savings,
investments, and protection.

Key Elements:
● Income: Salaries, side hustles, etc.

● Expenses: Bills, rent, groceries, etc.

● Savings: Emergency fund, retirement savings, etc.

● Investments: Stocks, bonds, real estate, etc.

● Protection: Insurance, retirement plans, etc.


Why Budgeting is Important?
Key Benefits:

● Track Spending: Prevent overspending and identify


unnecessary expenses.

● Debt Management: Help you pay off loans and credit


card debt faster.

● Achieve Financial Goals: Save for big goals like buying a


house or retirement.

● Reduce Stress: Helps you feel in control of your finances.


Budgeting Methods
50/30/20 Rule:
● 50%: Needs (rent, bills, groceries).

● 30%: Wants (entertainment, dining out).

● 20%: Savings and debt repayment.

Zero-Based Budgeting:

● Every dollar is assigned a specific purpose, leaving you with $0 at the end of the
month.

Envelope System:

● Using cash in envelopes for each category (e.g., groceries, entertainment) to limit
spending.
Creating a personal budget

Step 1: List all sources of income.

Step 2: Categorize monthly expenses (fixed


and variable).

Step 3: Set financial goals (short-term and


long-term).

Step 4: Allocate your income according to


your chosen method.

Step 5: Track your spending and adjust if


necessary.
Saving Money

Building an Emergency Fund: Aim for 3-6


months of living expenses.

Automatic Savings: Set up automatic


transfers to a savings account.

Cutting Unnecessary Expenses: Track what


you spend to find areas to cut back
(subscriptions, dining out, etc.).

Use of Savings Apps: Apps like Digit or


Qapital that help you save by rounding up
purchases.
Reducing Dept
Debt Snowball Method:
● Pay off the smallest debts first while making minimum payments on others.

● As each debt is paid off, the amount freed up goes to the next smallest
debt.

Debt Avalanche Method:

● Pay off the highest-interest debt first.

Tips:

● Avoid high-interest debt like credit card balances.

● Consider consolidating or refinancing loans for lower interest rates.


Investing for the Future
Types of Investments:
● Stocks: Owning a share in companies.

● Bonds: Lending money to companies or the government.

● Real Estate: Investing in property.

● Retirement Accounts: 401(k), IRA, Roth IRA.

Risk vs. Reward: The higher the risk, the higher the potential reward (and vice
versa).
Start Early: The earlier you start investing, the more time your money has to
grow due to compounding.
Tracking your progress

Use Apps: Mint, YNAB (You Need A Budget),


or PocketGuard to track income, expenses,
and goals.

Review Monthly: Regularly check your


spending and saving to ensure you're on
track.

Adjust When Needed: If you're overspending


in one area, adjust your budget.
Tips for Financial Success

Live Below Your Means: Don’t spend more


than you earn.

Plan for Big Expenses: Budget for things like


vacations, medical costs, or large purchases.

Stay Informed: Continue learning about


personal finance and adjusting your strategy
as needed.

Automate Savings and Payments:


Automate as much as possible to avoid
missed payments and encourage savings.
Conclusion
Recap:

● Personal finance and budgeting are


essential skills to achieving financial
stability.

● Following budgeting methods and


saving strategies will help you meet your
financial goals.

Call to Action: Start by setting up a simple


budget today!
Thanks!
Do you have any questions?

CREDITS: This presentation template was created by Slidesgo, and


includes icons by Flaticon, and infographics & images by Freepik

Please keep this slide for attribution

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