Question

WRITE ONE OR TWO PARAGRAPHS, please post about Personal Budgeting. Please post specific examples from the reading you found significant about these topics, as it helps define or contribute to Personal Finance. Explain the advantages and disadvantages. Support your answers with examples from the textbook, current events, or other forms of media.
Example: If you thought budgeting is only done if you are going to retire soon, or if you have no money. After reading, you will see that Budgeting and planning should be done by everyone, at all income levels...

Answer 1

Budgeting is generally a plan to spend an entire money earned by an individual. This particular spending plan is known as Budget. It is simply balancing expenses with income. Creating the spending plan known as budget allows us to determine in advance whether one will have enough money to do the things he need to do or would like to do.

Example: An individual's earnings depend upon the income from various sources. At every age of life, after one starts earnings, budgeting is needed. If one needs to plan a vacation, he needs savings to keep aside from their monthly incomes to plan it.

Steps which helps making personal budget:

1) Gather all financial statements

2) Calculate the income

3) Create a list of monthly expenses

4) Determine fixed and variable expenses

5) Total your monthly expenses

6) Make Adjustments to the expenses

Thus, personal budgeting is very important for restricted spendings as a planning tools.