Personal Finance/Budgeting
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Budgeting involves maintaining control over your expenditures. There are typically three phases that show a maturation of a control of your budget.
- Defining - Defining your inflows and outflows to get an idea of your cash flow.
- Setting - Setting your budget to control how much your expenses are each month.
- Improving - Improving your cash flows by reducing your expenses and increasing your income.
Contents |
[edit] Making a budget
[edit] Write out your total income
Include wages, salaries, rent collections, settlements, allowances, or any other source of money you get.
[edit] Write out your fixed costs
These are the expenses that come in bill form like insurance, car payments, rent or mortage payments, or paryments to any other kind of loan. Costs like these need to be paid and don't change no matter how much or little you use them. It is important to get these down first, since these payments are generally out of your control.
[edit] Write out your variable costs
After you pay your bills, you can now allocate what's left of your income to other things that need to be paid. Groceries, utility bills, and other costs within your control go here.
[edit] Sample
[edit] Monthly income
- Primary employment: $1600
[edit] Fixed monthly expenses
- Rent / Mortgage: $300
- Car payment: $336
- Phone: $55
- Kirby: $50
- Insurance: $80
[edit] Variable monthly expenses
- Gas: $80
- Cigarettes: $150
