taking stock

Budgeting - How to Keep It Real

Budgeting helps you keep track of your day-to-day finances so you can reach your goals. Which of these best describes a personal budget?

1. A complex plan that forces you to cut back your spending
2. A written plan to help you decide how money will flow in and out of your personal accounts each month
3. A formal plan that can’t be changed once it’s put in place

“B” is correct. To set up a budget: Total up your monthly income from work, alimony, and/or benefits. Then add up your monthly expenses, such as for housing, food, and utilities. Also average in occasional expenses like car and life insurance premiums. Finally, subtract your expenses from your income. If your expenses exceed your income, find ways to boost your income or cut back on what you spend. If money is left over, consider placing it in savings. Click here for more budget help.