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Budgeting

The best way to envision financial wellness is to make sure your monthly inflows of cash covers the monthly outflows. Get a memo pad a sit down and write down your outflows.

Use a backwards approach and figure out your expenses.  You can categorize the outflows by fixed and discretionary expenses.  Try to make a list of your monthly outflows as shown in the diagram below.  Adjust accordingly to make sure your inflows cover your outflow.

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Budgeting Example:

		January	February	March	April
Outflows:
	Fixed expenses:
	Mortgage	450	450	450	450
	Insurance	75	75	75	75
	Telephone	50	50	50	50
	Car payments	200	200	200	200
	Electricity	100	100	100	100
	Property insurance	75	75	75	75
	Grocery	200	200	200	200
	Gas	100	100	100	100
	Total fixed expenses	1250	1250	1250	1250
	Discretionary
	Clothes	100	100	100	100
	Vacation	100	100	100	100
	Entertainment	100	100	100	100
	Retirement	50	50	50	50
	Savings account	100	100	100	100
	Total discretionary exp.	450	450	450	450
	Total Outflow	1700	1700	1700	1700
Inflows:
	Individual Salary	1850	1850	1850	1850
Net Inflows (outflows)		150	150	150	150

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