topic 2 budgeting

professor penny

According to the United States Department of Agriculture’s Economic Research Service, Americans spent an average of 9.7% of their disposable personal incomes on food. An average of 5.0% was spent on food at home and 4.7% was spent on food away from home.

Learning goals

By the end of this topic, you should be able to:

Explain the budget process
Create a monthly budget

section outline

Topic 2 Budgeting

Content Videos

The Gus A. Stavros Center for the Advancement of Free Enterprise and Economic Education at Florida State University is pleased to offer these resources. They were created by Teaching Professor Joe Calhoun.

The captions were created by a computer program so sometimes they may be inaccurate or contain spelling or grammatical errors.

You may alternate the views by clicking on the white icon on the top-right corner of the screen.

The videos should not be downloaded or distributed beyond this site.

Mark Dunaway is a friend of the Stavros Center, advocate for personal finance literacy, and contributor to the Unconquered by Debt program. He created a series of videos about budgeting and lifestyle expectations. We encourage you to visit the separate section on our page titled Budget Project. His introductor video is copied here.

key point

A budget is your healthy spending plan. It will guide you to your goals and inform when you’re off track.

Conversation with Coach Chris

Chris Hogan is the author of two #1 national best-selling books: Everyday Millionaires (2019) and Retire Inspired: It's Not an Age; It's a Financial Number (2016). While visiting Florida State University, he met with Stavros Center Director Joe Calhoun to discuss a variety of topics. In this segment, they discuss budgeting.

Certified peer mentors

Mentors give presentations to groups about our topics. They also assist other students in personal finance matters and answer questions during individual meetings. To schedule a presentation or an appointment to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.

a topical story

The group of friends all huddled into a corner booth at the Barnes and Noble Cafe, chattering, excited for the weekend.

“Jamal scoot over,” Jayla said.

“Dude I have like three inches of space over here.”

“Three inches that I need!” Jayla said, pushing her brother to the edge of the seat.

“Okay you two, focus. So what are the plans for the weekend?” Madison asked the group.

“There’s a really cool music event happening in college town, we could go to that. Oh! Or we could go to the movie theater. Or there’s a nice hiking trail a couple hours away--”

“Wait Ethan,” Isabella interrupted. “We’ve got to think about how much those things cost. I am learning that the hard way,” she said laughing, remembering her conversation about her expensive coffee addiction with Jayla. “Movie tickets and day trips hours away cost a lot.” She said.

“That’s my girl,” Jayla started. “She’s right, let’s find something that will fit into everyone’s budget.”

“What about having a picnic? We can all pitch in--I’ll bring the snacks, Jamal can bring a few board games, oh and Madison you could bring some stuff for us to paint?” Diego suggested.

“Sorry, it’s supposed to rain this weekend. Again.” Jamal said. “You really don’t think we could swing going to the theater? Tickets are only $10.”

“Right but then you’re gonna want snacks, and a drink and before you know it a trip to the movies costs $20. All in a couple hours.” Isabella said.

“How about you all come over to my place?” Ethan suggested. “We can watch a movie there and all cook together. Way cheaper for a whole lot more food than we’d get there.”

"Yeah and then we can pick whatever movie we want.” Madison said, excitedly.

“Yes! I vote Avengers!” Isabella said.

“Same!”

"For sure,” the group echoed.

“Woah, woah, my house, my rules.” Ethan said.

“Shut up, Ethan. You sound like my mom.” Diego said as the group laughed.

(Story created by Jasmine George, Ana Siqueira, Courtney Swanson and Alex Thompson)

related books

These books have a chapter directly related to this topic. Please read them for more details.

Chapter 2: Kiyosaki, Robert. Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Plata Publishing, 2017.

Chapter 1, 2, & 3: Ramsey, Dave. Dave Ramsey's Complete Guide To Money. Ramsey Press, 2012.

Chapter 3: Hogan, Chris. Retire Inspired: It's Not an Age, It's a Financial Number. Ramsey Press, 2016.

Chapter 2: Bach, David. The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich. Crown Publishing Group, 2016.

Principles 13 & 18: Siegel, Cary. Why Didn't They Teach Me This in School?: 99 Personal Money Management Principles to Live By. CreateSpace Publishing, 2013.

Chapter 1: Orman, Suze. The Road to Wealth. Penguin Publishing Group, 2010.

Chapter 6: Ramsey, Dave. The Total Money Makeover. Nelson, Thomas, Inc. 2013.

Chapter 4 & 10: Lowry, Erin. Broke Millennial: Stop Scraping By And Get Your Financial Life Together. Penguin Publishing Group, 2017.

additional resources

You are welcome to download and use our budget file to get started with your budgeting habits. We encourage you to complete the more detailed Budget Project file in our separate section.

https://www.igrad.com/landing/how-good-are-your-budgeting-skills-quiz

https://www.daveramsey.com/get-started/budget/?snid=start.budgeting-a

https://corporatefinanceinstitute.com/resources/knowledge/finance/budgeting

https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/steps-to-better-money-habits

https://www.igrad.com/videos/what-your-budget-may-not-tell-you

https://www.thepennyhoarder.com/budgeting/how-to-budget-with-variable-income/?aff_sub2=search

https://www.myfloridacfo.com/YMM/Calculators/ReworkBudget.aspx

https://www.myfloridacfo.com/YMM/SavingAndSpending/Budgeting/default.aspx

https://www.youtube.com/watch?v=Hnf5BRh5bdg

https://www.npr.org/2019/01/09/683530953/be-the-master-of-your-budget

https://www.annuity.org/financial-literacy/

others books

Malkiel, Burton. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing. W. W. Norton & Company, 2020.

Wood, William. Getting a Grip on Your Money: A Plain & Simple Christian Guide to Managing Personal Finances, Eliminating Debt, Spending, Saving & Giving, Investing for the Future. Intervarsity Press, 2002.

Bach, David. Smart Women Finish Rich, Expanded and Updated. Currency, 2018.

Bogle, John. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. Wiley, 2017.

Clason, George. The Richest man in Babylon. Dauphin Publications Inc., 2018.

Hill, Napoleon; Arthur R. Pell. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century. TarcherPerigee, 2005.

Lynch, Peter; John Rothchild. Beating the street. Simon & Schuster, 1994.

Kobliner, Beth. Get a Financial Life: Personal Finance in Your Twenties and Thirties. Simon & Schuster, 2017.

Orman, Suze. The 9 Steps to Financial Freedom: Practical and Spiritual Steps So You Can Stop Worrying. Currency, 2006.

Bach, David; John David Mann. The Latte Factor: Why You Don't Have to Be Rich to Live Rich. Atria Books, 2019.

Hogan, Chris. Everyday Millionaires: How Ordinary People Built Extraordinary Wealth―and How You Can Too. Ramsey Press, 2019.

important government sites

Housing:

Federal Housing Finance Board ensures the regulated entities fulfill their mission by operating in a safe and sound manner (Links to an external site.)

Ginnie Mae-the principal financing arm for government mortgage loans (Links to an external site.)

Freddie Mac makes homeownership and rental housing more accessible and affordable (Links to an external site.)

FHA is the largest insurer of residential mortgages in the world (Links to an external site.)

VA helps Servicemembers, Veterans, and eligible surviving spouses become homeowners (Links to an external site.)

Economy:

Bureau of Economic Analysis reports GDP, Income, International Trade, and many others (Links to an external site.)

Bureau of Labor Statistics reports Unemployment, Prices, Productivity, and many others (Links to an external site.)

The U.S. Department of the Treasury's mission is to maintain a strong economy and create economic and job opportunities (Links to an external site.)

The U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream (Links to an external site.)

Banking:

The Federal Reserve System performs five functions to promote the effective operation of the U.S. economy (Links to an external site.)

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation's financial system (Links to an external site.)

The National Credit Union Administration is an independent federal agency that insures deposits at federally insured credit unions (Links to an external site.)

Federal Regulation:

The Internal Revenue Service is the nation's tax collection agency and administers the Internal Revenue Code enacted by Congress (Links to an external site.)

The Federal Trade Commission protects consumers and competition by preventing anticompetitive, deceptive, and unfair business practices (Links to an external site.)

The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation (Links to an external site.)

The CFPB is committed to providing consumers with up-to-date information and resources to protect and manage their finances (Links to an external site.)

Links to an external site.)Other:

Social Security Administration (Links to an external site.)

Department of Education (Links to an external site.)

State of Florida

ECO 3041

ECO 3041 Personal Finance is a 3 credit hour course offered in-person and online each fall and spring semester. The purpose of the course is to provide you with the specific content knowledge of personal finance and to give you opportunities to start using that knowledge to create good habits, make better financial choices, and live a more fulfilling life. It covers material for all 33 topics listed here. See Professor Calhoun's most recent syllabus here. ECO_3041_SP21.pdf

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To schedule a presentation or an appointment with a certified peer mentor to discuss your situation email coss-financialpeermentor@fsu.edu or visit the Stavros Center financial wellness page.