Budgeting

Budgeting is a method of controlling debt accumulation by taking a more disciplined look at the inflows and outflows of money. Budgeting is often the first debt elimination alternative pursued by individuals and is often used by debt counselors in helping those in need.  Unfortunately, not everyone has access to budget applications or knows where to start in building a family budget.

The basic concept in putting a budget together is to summarize all sources of income and expenses for a family.  A realistic, long-term budget is one where the inflows of money or family income sources exceed the outflow or family expenses.

Typical Sources of Income Include:

• Salaries, rents, tips, fees, social security, pensions, individual retirement accounts, and interest income.  Most individuals have a very good understand of their sources of income.

Typical Categories of Expenses Include:

• Housing - Rents, mortgages, property taxes, electricity, gas, phones, water and other utilities, maintenance and repairs.
• Transportation - Vehicle loans, gasoline, train or bus fares, licensing, maintenance.
• Insurance - Health, life, homeowners, automobile.
• Food - Groceries, restaurants.
• Personal - Medical, clothing, health clubs, organizational fees or dues, personal care and grooming.
• Children - Medical, clothing, tuitions, school supplies, lunch money, toys and games, child cared.
• Pets - Medical, food, grooming.
• Entertainment - Movies, concerts, sporting events, cultural activities.
• Loans - Student, personal, credit cards.
• Other - Legal fees, gifts to others, donations, charitable gifts.

Other forms of this term include - budget, budgets