Learning About Money SP series. The difference between needs and wants, страница 2

•  uses an account book, or computer   program, to record all income and       expenses, and

•  helps show you where the money goes!

Learning About Money SP151—8  

The receipt method

Keep all receipts.  Each week add them up in each spending   category.  Record the totals in your spending plan.

The pros are . . .

•  easy to do

•  all family members can help

•  label by spending category makes                                      them easy to sort

•  receipts available for other purposes,                  such as income tax

The cons are . . .

             •  hassle to keep and store receipts

•  not all purchases have receipts

•  missing receipts—result in “holes”                          in record keeping

                       All family members need to be involved  for this method to work!

Learning About Money   SP152—9

The Envelope method

For small cash amounts each week—put money in a labelled envelope and mark on it what you spend.

The pros are . . .

             •  simplicity

•  control

•  less likely to overspend

•  can see when you are out of money

•  store receipts in each envelope, or mark                 on it what was spent.

The cons are . . .

             •  danger of money at home - fire and theft

•  temptation to spend cash

•  must keep receipts as proof of payment

       Remember—for a small service charge, you can  use a money order to get a receipt.

Learning About Money   SP153—10

                                     The transaction record book

You can keep a detailed record of all transactions in your bank    account.  Be sure to record all  income and expenses.   See Form SP30 for more details.

The pros are . . .

             •  expenses recorded only once

•  easy to use

•  a cheque is proof of a payment

•  pre-authorized payments can be arranged

•  can record debit card transactions so keep                   track of spending

 The cons are . . .

•  service charges on accounts

•  need to check carefully with the monthly                 statement, in case you forgot to record                  something

•  need to keep an accurate account of                     all transactions.

Learning About Money   SP154—11

The account book method

An account book gives a very  detailed record of all income   and expenses.  It can help you see where your money goes!

The pros are . . .

             •  shows income and expenses at a glance

•  gives a total picture of spending

•  can organize for tax purposes if self-                  employed, or need receipts

•  writing down expenses increases            awareness of where the money goes

•  shows if you are reaching your goals

The cons are . . .

•  takes time to record spending 

•  all family members need to help keep                  records and receipts

•  you need to be a person who likes detail.

Learning About Money   SP160—12

Drawing up a spending plan

     To set up a spending       plan follow these steps . . .

1.  Set goals.

2.  Know your income.

3.  Review your spending from                       last month.       

4.  Put numbers in your plan.

5.  Will your spending plan work?                     Balance your income and                          expenses.  Adjust as needed.

6.  Plan for the future.

Learning About Money   SP161—13 Spending categories

Some people like to plan  their spending in different  categories.  These may       include . . .

•savings

                    •    fixed expenses

•  flexible expenses

•  credit payments

•  others

Learning About Money   SP162—14

                                            The balancing act

Families can have a hard time balancing  income with their  expenses.

     If your income is greater than            your expenses - this is great!

          If your total income and expenses are the same, this is fine, too.

    But, if your income is less than expenses, it’s time to make changes . . .  

You have two choices                               •   cut expenses, or   

                             •   increase income.

Learning About Money   SP170—15

1.  Do you often make partial       payments instead of paying 

      a bill in full when it is due?                   yes    no

2.  Do you use a credit card        instead of cash for small        purchases?                                        yes    no

3.  Is your chequing account 

      ever overdrawn?                                yes    no

4.  Are you often broke on 

      paydays?                                            yes    no

5.  Are your credit cards near 

      their credit limits?                            yes    no

6.  Would an unexpected expense 

      cause you hardship?                         yes    no

7.  Do you sometimes buy things       that you really don’t need or

        want?                                                  yes    no