Build your own budget

As you can see, the budget for this family is very important. Sure, it would be fun to go out for dinner every night, but budgets make you figure out what comes first, like feeding your family and paying for medical care. Budgets require tradeoffs.

This budget does a good job balancing the family’s needs and wants. It covers the family’s fixed and flexible expenses — and even has room for discretionary and emergency funds.

Three good things to remember about a budget are:

  1. A good budget means you’re never spending more than you’re earning.
  2. If you can, your budget should include savings for your big goals, like buying a computer or going to college.
  3. If possible, try to leave some room in your budget for the surprises in life — like repairing your bike, for example.

Remember these qualities of a good budget:

  • Expenses are less than income
  • Includes savings for big-ticket expenses (like a car)
  • Allows for pocket money or unexpected expenses (like car repairs)

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