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How to create a budget and live by a budget

How to create a budget and live by a budget. Presented by: Deleigh Sowers and Rachael Swartz. Budgeting is the allocation of limited resources ( income ) to an unlimited number of ‘needs’ and wants ( expenses ). What does this mean? Not spending more than you earn. Create a Budget:

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How to create a budget and live by a budget

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  1. How to create a budget andlive by a budget Presented by: Deleigh Sowers and Rachael Swartz

  2. Budgeting is the allocation of limited resources (income) to an unlimited number of ‘needs’ and wants (expenses). What does this mean? Not spending more than you earn. • Create a Budget: • Determine your monthly income: How much money do you earn each month? Do NOT overestimate. Most Americans overestimate their earnings and underestimate their spending.

  3. Determine your spending: How much do you spend each month? Some spending is exact each month. Some spending varies each month and some spending is unexpected. Track your spending for a month. Write down everything you spend. The more you know about your spending habits the better your budget will reflect you.

  4. Determine the category of your spending: • There are three categories: • Fixed expenses – expenses that will stay the same each month, such as; savings, rent or mortgage, cell phone, loan payments… • Variable expenses – expenses that you cannot live without but the actual expenses varies each month, such as; food, utilities, clothing… • Discretionary expenses – choices you make on how to spend your money, such as; shopping sprees, gifts, fast food, impulse purchases…

  5. Determine how you can manage your spending: Look at your spending habits. Are there choices you can make to improve your spending habits? Are you late on your cell phone bill, therefore increasing your monthly payment each month? Do you eat fast food more than three times each week? Do you impulse shop? Do you ‘loan’ friends money? Once you become aware of these budget choices you can attempt to make better choices for your budget.

  6. BE determined to live by your budget: Budgeting is a process. The more time you devote to your budget the better you will be at sticking to it. Once you make the choice to live by a budget you will see you have more money!!! You will be wasting less and saving more.

  7. There are lots of great resources for how to budget. Dave Ramsey.com Focus on the Family. Com Clark Howard.com Suze Orman.com Money management programs like Quicken or Microsoft Money.

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