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Creating A Personal Budgets

Learn how to create an effective personal budget that accounts for both regular and variable income and expenses. This guide introduces essential concepts like estimating income conservatively, tracking expenses over time, and understanding surpluses and deficits. By averaging out bills and managing variable costs, you can develop a sustainable budget that works for you. Discover practical tips to navigate your financial future and empower your spending decisions.

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Creating A Personal Budgets

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  1. Creating APersonal Budgets

  2. Last Lesson: -Regular/Variable Income -Recurring/Variable Expenses -Savings -Credit

  3. Today Creating a budget Analyzing Surplus & Deficit

  4. -A budget is a plan for the future = An Estimate Creating a Budget -To create a “conservative” budget, you should….. -Under estimate your income AND OVER estimate your expenses

  5. Surplus If your income is MORE than your expenses then you have a SURPLUS

  6. Deficit If your Expenses areMORE than your Income then you have a Deficit

  7. YOU IN DA HOLE!

  8. Recurring – Rent, Utilities, Gas…etc Examples Variable – Eating out, truck repair, vet bill

  9. To make a conservative budget….

  10. The rule of thumb is to keep track of your income and expenses

  11. Over a period of a few months(min 3 months)

  12. Then average out your income and expenses

  13. This will assist you in creating a MANAGEABLE budget

  14. 3.You will have $$ to purchase stuff outright

  15. Example

  16. Looking at Rent;It is a fixed amount each month so you know that amount would stay @ $450

  17. But your bills varySo we average them out..

  18. $150 + $125 + $125 + $155÷ 4months= $138.75

  19. Each item is averaged and all the new totals become your new budget

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