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Creating an Effective Budget

Creating an Effective Budget, budgeting , saving, personal finance

finlitgal
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Creating an Effective Budget

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  1. Creating An Effective Budget www.lifethenfinance.com

  2. The best way to acquire financial security  is to have a sound budget. www.lifethenfinance.com

  3. Creating Your Budget: Getting Started • The backbone for your budget is how much money you make. • Use your net income, not gross. • Consider your tax refund as a bonus! www.lifethenfinance.com

  4. Figuring Your Income Include income from: • Your jobs • Businesses you own • Investments • Alimony or child support payments • Residual income, like rents or royalties • Any other source of income www.lifethenfinance.com

  5. Does Your Paycheck Vary? Determine your average monthly income: Total income from past 3-6 months Number of paychecks during that time Income Estimate www.lifethenfinance.com

  6. Figuring Your Expenses Your expenses include: • Fixed • Variable • Non-Essential www.lifethenfinance.com

  7. What Are Fixed Expenses? ? ? ? www.lifethenfinance.com

  8. Fixed Expenses Payments that are the same every month: • House/rent payments • Car payments • Cable payments • Loan payments • And more www.lifethenfinance.com

  9. What Are Variable Expenses? ? ? ? www.lifethenfinance.com

  10. Variable Charges Payments that change each month: • Groceries • Gasoline • Entertainment • And more Tip: Use an average amount of each variable charge for your budget! www.lifethenfinance.com

  11. What Are Non-Essential Expenses? ? ? ? www.lifethenfinance.com

  12. Non-Essential Expenses Things that we want, but don’t necessarily need: • Excessive amounts of clothing and shoes • Eating out • “Stuff” you buy only because it’s on sale www.lifethenfinance.com

  13. Self-Reflection Questions: • How much do I spend every month? • What are my variable charges? Can I reduce these? • How much do I need to make in order to get by? www.lifethenfinance.com

  14. Action Tips: • Write down your income and expenses. • Estimate your variable expenses. • Cut down variable expenses in order to… Earn More Than You Spend! www.lifethenfinance.com

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