For example, retirement plans, saving for emergencies, investment, or education. The saving part includes money allocation for our financial goals. For example, groceries, fuel, transportation, entertainment, gifts, shopping, etc. Whereas variable expenses are of the different amounts each month. For example, loan EMIs, mortgage payments, 401K payments, insurance payments, etc. Fixed expenses are of the same amount and recurring in nature. The expenditure part includes both fixed and variable expenses. The income part includes income from every source like salary, pension, reimbursements, dividends from invest meant in the stock market, income from rental property, etc. Components of a Personal BudgetĪ personal budget consists of 3 main components: Income, Expenditure, and Savings. Thus, budgeting is very helpful and should be an important part of our financial management.
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