Budget and investment Ro’ziyeva Xayrinisa

Budget and investment

Ro’ziyeva Xayrinisa

What is a Budget?

A budget is a spending plan, a tool to put you in control of your money. It shows how much money you have, where it needs to go to meet your needs and wants and when you will be able to reach your financial goals.

For women survivors of abuse, learning how to budget finances independently is an important step towards preparing for a stable future.

Budget = a plan for managing income and expenditures.

• Budget = a plan for managing income and expenditures.
• Four steps in developing a budget
• Establishing goals
• Estimating income and expenditures
• Setting up the budget
• Following and revising the budget

SETTING UP THE BUDGET

• Savings - cash set aside in a bank account to be used for financial emergencies and goals
• Regular expenditures - sometimes called fixed expenditures, are those essential monthly payments that are usually the same amount each month.
• Variable expenditures - are day-to-day living expenses.

The objectives of this module are:

• Explain the basics of money management
• Help you identify and set proper and achievable financial goals
• Provide strategies that will help you save money short- and long-term.
• Describe the various options to invest your money.
• Overview of Insurance Options

ESTABLISHING GOALS

• Identify what you need and want
• All family members should participate
• Be realistic
• Be specific
• Include short-range, medium-range, and long-range goals
• Make a list

WHY INVEST?

• Investing = the process of using money not required for personal and family needs to increase overall financial worth.
• Investing is different from saving.
• There is potential for making a lot of money.
• There are risks of losing money.

TYPES OF INVESTMENTS

• Stocks
• Mutual funds
• Bonds
• Money market funds

STOCKS

• Stock = shares of ownership in a company.
• Brokers = individuals or companies that specialize in selling stocks and other financial investments.
• Commission = a fee paid to a broker for purchasing stock for you.
• Dividends = profits that a company divides among its shareholders.
• Capital gain = refers to an increase in the value of stock or another asset.

MUTUAL FUNDS

• Mutual fund - an investment company that pools the money of thousands of investors and buys a collection of investments that may include stocks, bonds, and other financial assets.

MONEY MARKET FUNDS

• Money market fund - type of mutual fund that invests in short-term, high-liquidity investments.

How to achieve efficiency in budgeting investments (cont.)?

• Define credible and realistic budget envelopes with hard budget constraint
• Time needed for obtaining reliable data and appraisal defines timing of project proposal
• Invest time in training in adequate development and analysis of costing and benefits of projects
• Budget realistically maintenance costs existing capital cost
• Base cost of investment on whole of life costs (capital investment+ operating cost+ maintenance cost)
• Develop procedures for reviewing all major investment proposals (done by MoF of Agency)
• Analyse the final results of projects in terms of both costs and benefits
• Prepare completion reports for all investment projects (with MoF or Agency)

Thank you