“A budget is a plan to help you track income, know when the bills come in, and know how much cash is available for meeting your financial wants and needs (Stephens).
There are four basic steps you can use to manage your money so you will be ready for financial suprises when you move out of the house.
1)Understand your income. Know exactly how much money you are taking home. Your GROSS INCOME is the totally amount of money you make. NET INCOME is what you have left after taxes, social security, and insurance expenses are deducted.
2)Know how you spend your money. Keep track of your spending patterns and habits. FIXED PAYMENTS are amounts whose due dates are the same each month and are easier to remember than variable expenses which change from say to day and month to month.
3)Make a payment and saving plan. Use a form to map out your budget into areas of your spending. Divide those areas among fixed expenses, variable expenses. Variable expenses, occasional expenses, and savings. Decide how much you can afford to spend in each area.
4)Set goals for yourself. Having a budget makes it easier to save for long term goals like buying a car, or saving for a retirement plan.
An example Workseet
