What Things Should You Include In Your Budget

One of the things that plays a role in your journey to financial freedom is how you prepare and follow your budget. A budget is a listing of all your expense and income in a specified range of time. It can be a daily, weekly or monthly which is the ideal to use. I have also written some articles as it is one of the essential things you need to know in personal finance. You can read how to create a budget, a student's budget, budget-making for couples and a cool saving idea using envelopes to learn more about budgetting. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/components-of-a-budget.jpg"] In this article, I want to share about what are the major components of a budget. These components are the most common things every budget should have. If you are just starting to create your personal or family budget, it can help you make one easier. The major components in one's budget are the following: [impt text="1. Savings."] Pay yourself first. The top item on your budget should be your savings. The ideal amount starts at 20 percent of your monthly income as I have shared in salary savings matrix. You should also include items such as investments in stocks or mutual funds if you have any. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/savings-in-a-budget.jpg"] [impt text="2. Major obligations."] Second to savings are your monthly obligations. They are necessity in kind but more important. Examples are tuition fees, house mortgages or rentals and utility bills. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/utility-bills-in-budget.jpg"] [impt text="3. Necessities."] You should also include items that you count as a need. It can include your grocery items, clothing, allowances, and other things that you consider necessity. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/grocery-items-in-budget1.jpg"] [impt text="4. Miscellaneous expenses."] Of course we wanted to enjoy our hard-earned money. You should also allocate some amount to expenses that falls on miscellaneous category. This can be used for entertainment, vacation and any other unexpected spending. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/vacation-expense-in-budget.jpg"] [impt text="5. Credit card bills."] Another major item in your budget should be credit cards or credits. You should always pay your credit card bill amounts in full so finance charges won't add up to the next billing cycle. Also, all credits and loans should be paid regularly to avoid interest fees on late payments. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/credit-card-bills-in-bugdet.jpg"] [impt text="6. Monthly income."] All five items above are expenses. Of course you need to list down all your source of income. If you are a full-time employee, then this can be your monthly salary. If you are a freelancer, then include your net earnings on that month. [panel-image src="http://moneygizmo.net/wp-content/uploads/2013/02/monthly-income-in-budget.jpg"] That would be all the major components of a budget that I would suggest. Note that there is no standard in creating your personal of family budget. Let this article be your guide in starting to create a budget.[divider] Personally, I would suggest that even if you have enough income to spend to all your budget items, you should think of ways to lessen your expenses and put more to your savings and investments or your emergency fund if you still have none. So, start to create your budget now!

Mark Hugh Neri

Looking for financial planning workshop or for life and/or health insurance with investment options? Got questions related to personal finance? Feel free to message me at Money Gizmo (see link below)

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