Everyone should budget their money and time. Budgeting is simply about knowing how much you have, how much you will have, and how much you will lose. Everyone has expenses that are part of their life one way or another. Rent, electricity, heat, food, and others are regular expenses that everyone has. Budgeting allows you to save money and invest it in a smart way so that you can have a restful retirement, buy that new car, or go on vacation this summer. Budgeting allows you to know how much you will need to meet your financial goals, whatever they may be.

The first rule of budgeting is to calculate your regular expenses. These are expenditures that are relatively predictable, such as rent, etc. These expenses should be relatively straightforward to calculate for a long period of time. If you’re not planning on moving anytime soon, you know how much you will pay in rent over the next year. For other expenses that you can’t predict exactly, estimate based on previous expenditures. Base your food expenditures over the next month on what you paid the previous month, etc. Always overestimate your expenditures when in doubt to give yourself extra leeway.

Once you have a grip on your expected expenditures, you can start to calculate how much you expect to earn over the next year. Once you have expected expenditures and expected income, you can balance your budget and start to any excess money away for that brand new car you wanted.

Gary Kapanowski knows the importance of budgeting as an accountant for Moeller Manufacturing in Wixom, Michigan.

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