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CREATING A BUDGET

• The best way to acquire financial security is to have a sound budget.
• The backbone of any budget is based on how much you make.
• When budgeting, it’s critical that you use your net income as opposed to the gross.
• If you have a variable paycheck, using a close estimate should suffice in most situations.

Fixed expenses don’t usually change, such as your mortgage or car payments, property taxes, and so on.

• Take some time to make a list of your fixed expenses and total the result.

Variable expenses vary from month to month.

• The good thing about variable expenses is that you can change them.
• Take a few minutes to list your variable expenses and total the result.
• A good strategy is to go through your recent credit and debit card purchases to see where your money is going.

Non-essential expenses are things we want, but don’t necessarily need.

• A good test of willpower before making any purchases over $50 is to ask yourself: “Is this a want or a need?”
• Make a list of non-essential expenses and their total.
• Ask yourself: Do I need everything in this list? Is there anything I can cut out without losing the lifestyle I desire?

Write down all your fixed, variable, and non-essential expenses and add up the total. This total will be your base expenditure for the month.

• The only way to create a workable budget is to adhere to this one simple rule: Earn more than you spend.