As we wind down 2018 and the holidays approach, it’s time to start talking about budgeting. This time of year can be particularly expensive – from entertainment, travel, and gifts. We will start a content series on budgeting and provide you with tips and techniques to make sure you stay on budget this holiday season!
What is a budget?
We define a budget as a plan to SAVE and spend your money. There is a strong emphasis on having a saving component of your budget to store money away for future consumption. Saving can be part of an emergency fund, retirement, vacation, or even a gift.
The starting point for a budget is your income or take home pay. Once you arrive at that figure (usually for the month) you subtract your essential expenses, including but not limited to: rent, food, utilities, etc.
Not all of your expenses are fixed, and there needs to be variable component to your budget. Food, electricity, and transportation are not fixed expenses, so it’s important to have flexibility.
Having a savings portion to your budget forces you save money, rather than consuming it. Saving is a critical component of wealth accumulation to #BuildYourNest
