BUDGETS help you plan; they allow you to manage your money in a skillful way.
What are your priorities? Do you plan to go on vacations often? Or do you prefer to stay in an nice home? Do you prioritize your car?
Your budget will mostly be based on your priorities. If you wanted to travel often, your house probably wouldn't be the greatest. You should make budgets over certain time periods, or items (houses, cars, vacations, etc.)
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To make a budget, you need to know exactly how much you're making (income). This typically makes it easier for those who get paid by SALARY because they have a SET amount of money they're paid.
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When you use the equation, your answer should be zero. If it's not and you have money left over; that's honestly not a BAD thing. You can use the left over money when costs may vary; or put it into savings.
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Many people find budgeting annoying or time consuming. This is because budgeting IS time consuming.
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FIXED EXPENSES- Expenses that never change; These expenses have a set amount of money to be paid.
VARIABLE EXPENSES- Expenses that can change; The price of these expenses fluctuates and are usually unpredictable.
DISCRETIONARY EXPENSES- Expenses that are not needed; These expenses are WANTS. This includes new clothes, subcriptions (sometimes), etc.
Expenditures. In the US, the average household budget consists of expenditures on housing (16%), transportation (14%), Food (10%), Utilities (11%), Insurance (9%), Taxes (12%), Savings (8%), Healthcare (6%), Entertainment (4%), Apparel (3%), Education (2%), and Personal Care (1%), etc. This is a mix of all of the 3 expenses mentioned above. If you know what kind of expenses you're budgeting; it's easier to organize them.