Breaking down the Budgeting Basics Part 3 “The Structure of a Budget”

So at this point, you picked out your budgeting techniques but what about the components. Let’s examine what main things that have to be apart of every budget. Hmm, there is the income, of course, the expenses…dread and the obvious reason why we want to do this, the savings. The structure of a budget I could have started in the beginning, but I’m serving this as a refresher, like how the ending briefly reminds you of the opening plot of a good mystery. And so you ask yourself, why didn’t I catch that clue at first. He did have the knife in his kitchen drawer. Just like you always have the tools, the main components never change, this is always part of every budget.

Income

The money you make and your assets make up what we call your income. In most households, it’s you receive after minus taxes. A sum of all profits, wages and earned interest over time. The myth it’s thinking that if we had more of that income it would solve all our problems. The reality is without managing the little you have now, you would bigger challenges with more money. Struggles can be enlarged with not enough money to cover the basics, so increasing your income is still important. Managing that income is to put a little more appreciation into your worth and realizing not everything should be wasted.

Expenses

I would like to sum this up as just bills, but let’s face it anytime we spend money the negative impact is an expense. That deduction that made your balance go down instead of up, you just gained an expense. Some terminology can be described as even the cost required for something. I took that having the thought of the value of something could possibly mean to be a future expense. The positive side of this is that you have complete control over this, just one thought before you spend. This means you can be in charge of your budget!

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Savings

Think of your savings like a bucket of water. With each bucket of water use can use to water a plant and watch it take root and grow. Without it, plants may wither and might not survive. Savings are defined as income not spent or deferred consumption. It also mentions the reduction of costs. So in other words, our best effort to save is to cut costs. You want more water don’t consume so much, save a little for later. I used to think I could only save if I had more money. When the time that I had more money to me it only looked like to spend. To actually get in a habit we need to be doing something repeatedly until we can unconsciously do it. Mastering this habit of saving you have to start by actually putting money aside. Don’t place fear unto your mind by thinking its not enough. Put something, anything and create a habit.

So what do you want to try? Are you ready to take control over your money and budget? Project your life like a business structure and estimate on growth. Now you can imagine freedom with money even though you gave it limits. I look forward to knowing if this has helped you not to be afraid of the word budget. Lay everything out on the table and figure out what it’s going to take to get you there. A lot of honesty and a lot of evaluation.

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