Copyright Goodheart-Willcox Co., Inc. 39 Section 2.1 Personal Financial Landscape not translate into a tax deduction. However, it may make a person feel that he or she is contributing to the betterment of society. It pays to investigate before you give. Some charitable organizations are more efficient and effective than others. Some groups may pose as charities but use the funds they collect for personal gain. Be aware that there are times when only a portion of a contribution is tax deductible, especially if the contributor receives something in return. For example, buying tickets for a charitable dinner may require that the actual cost of the dinner is not deductible. Only the portion that is going to charity may qualify. Step 4: Analyze Estimated Income and Expenses Data is information. Data analysis is the process of studying data with the goal of discovering new information that can help with making decisions. Performing data analysis on your estimated income and expenses is necessary in order to evaluate your budget. Do your total estimated expenses equal the total estimated income? Do you have money left over? If you have nothing left or are “in the hole,” you need to find ways to increase income or reduce spending. To increase income, explore the following possibilities. • Can you earn money by doing special jobs for your family or neighbors? For example, can you do the grocery shopping, wash windows, reorganize closets and cabinets, or do some yard work? • Can you get a part-time job? Look for help wanted ads. Ask friends, coaches, neighbors, and store managers about job possibilities. • If you have a job, can you negotiate an increase in wages? Is it possible to work more hours without sacrificing time you need for schoolwork and other important activities? To reduce spending, study your record of expenses. • Start with your discretionary expenses. Can you eliminate any items or reduce the cost of items you buy? Maybe you can cut back cell phone data usage. Perhaps you can check out books or movies at the library. • Look at fixed and variable expenses. These expenses may be necessary, but can you reduce their cost by making substitutions? For example, try a generic shampoo instead of an expensive brand. Drink tap water instead of bottled water. • Can you cut spending that does not bring you closer to achieving your goals? For example, if good health is a priority, you can walk instead of driving or taking the bus. Step 5: Analyze Actual Income and Expenses Now it is time to bring together your goals, income, and expenses into a budget. A budget reduces the temptation to spend carelessly. Figure 2-3 shows a completed budget. When a budget period ends, fill in the Actual column and total each section. Then, subtract the Actual amount from the Estimated amount. Enter