Assessment: Financial Budgeting
Creating a budget can be challenging at times but also benefits you in many ways. Sometimes it is hard keeping track of all of your expenses and managing the money in a way that helps you save the money. The tricky part is keeping track of it all the time as well as having to give up some things you may not want to. Therefore it is crucial to know the difference between your needs and your wants. Additionally, it can benefit you by keeping a surplus meaning there is no debt that you owe and helps you save your money.
Five items that should be part of a budget would be your monthly gross wage to show you how much you earn each month. The cost of living because that is always expensive and can lead you into debt. Food because you need food to live. Also, savings to show how much of your budget your keeping to save for retirement. Lastly, health insurance because you need that if you want to live a long life and be covered when you're sick. These are at least five items that should definitely be apart of a budget.
While using this module as a guide, it is apparent that someone would save for both short-term and long-term expenses because it not only provides you with a surplus right now, but it will also provide you one in the future. Furthermore, this won't make you have to deal with having to pay debts all the time. Every month I saved $1,221 which is a lot, however, I believe that at least 100 dollars each month is a reasonable amount for a personal budget.
At the end of my budget, it ends with a Surplus. I ended up with a Surplus because I sacrificed some of my wants and focused more on what I need to get me started off with my job. As well as making sure I was saving money for the future.
To end with a surplus I decided to start off living with my cousins in Philadelphia. I spoke with them and they would love to let me live there for free. This saves me a ton of money as well as saves money for a car as well because I can use their cars or public transportation. For savings, I saved only 10 percent each month but as I get older I can change that percentage to be higher. However, this did help me save money on both ends. Lastly, I cut down the number of times that I would dine out because it helped save money but also let me dine out two nights a week. Overall these decisions helped me lead to my final outcome which was a surplus and saved 1,221 dollars.
There were many lessons that I learned by completing this salary-based budget. For instance, I learned that there are some expenses that you may have to be cautious about while spending your money. Additionally, I learned that you always want to have a surplus and not a deficit. If you do have a deficit that means you need to go back and figure out what expenses you can't fix to end up giving you a surplus.