Budgeting 101:
Your Money Guide For Getting Through School
Step 5
All expenses are totaled and then subtracted from the total income figure for the month.
Step 6
Next, divide total expenses by the frequency of income or the number of paycheques the household receives each month. This will tell you how much money to set aside each paycheque. If the expense total is greater than the income total, you are off track financially.
Step 7
You must begin to prioritize expenses. Keep track of when you use credit cards. Then ask yourself if you want to borrow every month for these expenses. Each month, enough savings should be set aside to cover fixed and some flexible expenses. This reserve method will save you from living paycheque to paycheque. Review the spending-plan each income period to start. At the end of each month, compare actual expenses against what you budgeted. As time passes, you may want to only perform this comparison on a quarterly basis.
Tips:
Smart Spending Techniques, Practices and Recommendations
- Have weekly meetings on how to improve spending habits with family members. Make getting out of debt a family activity.
