Budgeting

What is a Budget?

A way to keep track of:

• Income
• Expenses
• Savings

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Money coming IN

Money going OUT

Expenses Sort

Organize the expenses into TWO categories…

• What are your categories?

Types of Expenses

Regular

Things you NEED to spend money in order to live comfortably

Discretionary

Things you do NOT need to spend money on

Types of Expenses

Fixed

You pay the SAME amount of $$ every time you pay the expense

Flexible

The amount of $$ you pay CHANGES every time you pay the expense

4 Total Categories

Regular Fixed

Rent, Car Payment, Insurance

Regular Flexible

Groceries, Basic Clothing, Gasoline, Utilities

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Discretionary Fixed

Health Club, Netflix, Cable

Discretionary Flexible

Entertainment, Eating Out, Designer Clothing, Charity

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The “Golden” Equation

Income = Expenses + Savings

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Income should always be EQUAL to your combined expenses & savings

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Revising a Budget

1. Lower DISCRETIONARY expenses
1. Entertainment, charity, eating at restaurants, etc.

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• Lower Regular FLEXIBLE expenses
• Basic clothing, water, electricity, etc

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• Lower Regular FIXED expenses
• Rent, insurance, etc

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Steve’s Projected Budget

Steve’s January Budget

Steve’s February Budget