creating a budget

1
Creating An Effective Budget
www.lifethenfinance.com
2
The best way to acquire financial security  is to
have a sound budget.
www.lifethenfinance.com
3
Creating Your Budget Getting Started

• The backbone for your budget is how much money
  you make.
• Use your net income, not gross.
• Consider your tax refund as a bonus!

www.lifethenfinance.com
4
Figuring Your Income

• Include income from
• Your jobs
• Businesses you own
• Investments
• Alimony or child support payments
• Residual income, like rents or royalties
• Any other source of income

www.lifethenfinance.com
5
Does Your Paycheck Vary?

• Determine your average monthly income
•  
•  
• Total income from past 3-6 months
• Number of paychecks during that time
•  
•  
• Income Estimate

www.lifethenfinance.com
6
Figuring Your Expenses

• Your expenses include
• Fixed
• Variable
• Non-Essential

www.lifethenfinance.com
7
What Are Fixed Expenses?
? ? ?
www.lifethenfinance.com
8
Fixed Expenses

• Payments that are the same every month
• House/rent payments
• Car payments
• Cable payments
• Loan payments
• And more

www.lifethenfinance.com
9
What Are Variable Expenses?
? ? ?
www.lifethenfinance.com
10
Variable Charges

• Payments that change each month
• Groceries
• Gasoline
• Entertainment
• And more

Tip Use an average amount of each variable
charge for your budget!
www.lifethenfinance.com
11
What Are Non-Essential Expenses?
? ? ?
www.lifethenfinance.com
12
Non-Essential Expenses

• Things that we want, but dont necessarily need
• Excessive amounts of clothing and shoes
• Eating out
• Stuff you buy only because its on sale

www.lifethenfinance.com
13
Self-Reflection Questions

• How much do I spend every month?
• What are my variable charges? Can I reduce these?
• How much do I need to make in order to get by?

www.lifethenfinance.com
14
Action Tips

• Write down your income and expenses.
• Estimate your variable expenses.
• Cut down variable expenses in order to
• Earn More Than You Spend!

www.lifethenfinance.com