The Art of Budgeting

Forming a budget is the first step when building a solid financial foundation. The goals of a personal budget are as follows:

• Quickly show your “before expenses” and “after expenses” estimated balance
• Track paid vs pending expenses
• Track upcoming expenses (forecasting)
• Track the amount of money going to each expense
• Identify and develop trends to optimize your budget

Keeping the budget simple and building upon it is a great way to get started. As you’ll see in the image below, one way we can keep the budget simple is by tracking only the “core” expenses. This means we’re excluding everyday items such as gas, coffee, food, etc… If you’re into that level of tracking, even better, but for this post the focus is on your core expenses.

Forming a Budget

As defined earlier, core expenses are items that have a recurring frequency or significant impact to the budget. Some examples are below:

Electricity, Cell Phone, Insurance, Car Payment, Credit cards, Internet/TV, Rent/House Payment, College Loan, Property Taxes, Medical expenses, House Repair expenses, Other recurring expenses

When building a budget, remember to keep it simple. It’s important to get into the budget mindset…