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7. Creating a Budget
A budget is nothing more than a breakdown and plan of how much money you have coming in and
where it goes. If you don’t know how much money you have coming in and where it goes, your road
to financial success will be a difficult one. Creating a budget may not sound like the most exciting
thing in the world to do, but it is vital in keeping your financial house in order. In order for your budget
to be successful you have to provide as much detailed information as possible. Ultimately, the end
result will be able to show where your money is coming from, how much is there and where it is all
going. Remember to review your budget monthly.
Example Budget
Category
Budget
Money I receive each month
$3000
Fixed Expenses (stay the same each month)
FOOD
$250
HOUSING
Mortgage/rent
$1500
Electricity
$60
Gas
$50
TELEPHONE
(Home and/or mobile)
$60
PAY TV
$50
INTERNET
$40
HEALTH & MEDICAL
Health insurance
$35
Gym/sport
$30
FIXED EXPENSES TOTAL
$2075
Variable Expenses (change each month)
SHOPPING
Clothes Shopping
$100
Other shopping
$50
ENTERTAINMENT
Movies, eating out, bowling etc
$60
Other expenses
$0
TRANSPORT
Buses/trains
$65
Fuel
$0
Car services/repairs
$0
Car insurance
$0
Car registration
$0
HEALTH & MEDICAL
Doctor/Dentist
$50
Chemist/Medicines
$200
HOLIDAY
$0
VARIABLE EXPENSES TOTAL
$525
TOTAL MONTHLY EXPENSES
$2075+$525=$2600
NET INCOME MINUS EXPENSES
$3000-$2600=
$400
This is just an example budget. Obviously you can change the variable or fixed expenses to suit your
lifestyle. Budgets can be done monthly, fortnightly or weekly, whichever suits you best. It is a great way
of keeping track of your expenses and to start saving.