What comes in (income) and what goes out (expenses)
Hey! Let’s dive into budgeting – but don’t worry, it’s not as boring as it sounds. A budget is like a game plan for your cash. It helps you keep track of the money you get (income) and the money you spend (expenses). Let’s break it down:
1. Income: Your Cash Flow
Income is any money you get. It could be from a part-time job, weekly allowance, or cash gifts on your birthday. It’s your financial fuel.
2. Expenses: Where Your Money Journeys
Expenses are the things you spend money on. Like video games, movie tickets, or that awesome hoodie you bought last week. Expenses vary:
- Fixed Expenses: These are the regular ones, like your monthly Netflix subscription or your phone bill.
- Variable Expenses: These change a lot. Like grabbing a pizza with friends, or buying yourself concert tickets.
3. Keeping Score
To start, jot down what you earn and spend. You can use a simple app on your phone, or go old school with a notebook. Try this for a month. It’s like being a detective in your own financial mystery.
4. Do the Math
Subtract your expenses from your income. If you have cash left over, high five! That’s extra money for savings or something fun. If you’re in the red (spending more than you earn), it’s time to tweak your game plan.
5. Goal Setting
Think about what you want to save for – maybe a new game, a car when you turn 18, or just some extra cash for outings. Your budget is your blueprint to get there.
6. Change It Up
Your budget isn’t set in stone. It’s more like a Snapchat story – it can change based on what’s happening in your life. Update it as your cash flow changes.
7. Why Budget?
Here’s the secret: Budgeting actually gives you freedom. It’s not about stopping you from spending; it’s about spending wisely. When you budget, you call the shots with your money.
So, there you go – budgeting in a nutshell. It’s your way of making sure your money is going exactly where you want it to. And remember, your budget is like your personal money roadmap – and you’re the one in the driver’s seat!