|
|
|
A budget is a plan for saving and spending money. Setting up a budget does not mean you have save all your money and cannot buy things you want. Instead, it will help you spend your money wisely and save money for those things you really need. Read the following paragraph:
Keith wants to buy new sneakers. Keith would have to use his whole paycheck if he bought the sneakers. If he buys sneakers, he will not have enough money for the phone bill, groceries or supplies for school. Keith needs to set up a budget to help him manage his money.
Setting Up a Budget
To begin making a budget, list your income and expenses for each week or month. Writing a list of expenses and income will help you set up a monthly budget. You will also be able to see if you have any monthly savings left over after you have paid off all your bills.
EXPENSES |
|
INCOME |
||
|
Type |
Amount |
|
Type |
Amount |
|
Rent |
|
|
Work (1st job) |
|
|
Utilities (Gas, Elec., etc) |
|
|
Work (2nd job) |
|
|
Food |
|
|
Financial Aid |
|
|
Telephone |
|
|
Food Stamps |
|
|
Entertainment |
|
|
Other |
|
Transportation
|
|
|
Total Income |
|
Other
|
|
|
|
|
Total Expenses |
|
|
MONTHLY INCOME |
|
|
|
|
|
MONTHLY EXPENSES |
|
|
|
|
|
MONTHLY SAVINGS |
|
Staying on a Budget
Keith still wants to buy new sneakers but wants to stay on his budget. So he will have to save for the sneakers. He must pay his bills. If he does not make payments, he will start to develop a bad credit history. Here are possible plans for anybody who hopes to increase their savings:
· Spend less money on entertainment and save that money.
· Buy less expensive food and house products
· Work more hours at job on weekends
· Find a 2nd part-time job
Needs
and Wants
We often tell ourselves that we need to buy something. Yet we often just want it and don’t really need it. People need a place to live, food and water. Students might need books, school supplies or bus fare. However, you can live without any other material things and only want them. You want a CD, the latest jeans, concert ticket or CD player. A want is something you would like but can live without. A need is something you must have. You should avoid impulse buying and things you don’t really need when you are trying to save money for more important things.