So our next section in personal finance and money management is creating a personal budget for yourself. Now, you may or may not have already use a personal budget. And you may or may not already know how to. But if you haven't been using wine, it's really important that you start now. Because using personal budget on a regular basis really is the first step to gaining control on your personal finances. So this really sets the foundation for your own personal finance.

But before we begin, there are two worksheets that you're going to need to use that hopefully you've already completed prior to this lesson. Do you remember lesson number one on goal setting. If you can get out your worksheet titled goal setting worksheet, I'd like you to identify any economic or financial goals there on that worksheet. So scroll through the worksheet and circle any of Your goals that happened to be money related, then, I'd like you to consider are there any additional financial goals that maybe have popped up in your mind that you haven't thought about since the previous goal setting lesson? If so, write a couple quick notes and on this goal worksheet, and make sure that you classify any additions into 135 or 10 year goal projections. Next, go ahead and get out some paper and pen we're going to need to write a few things down.

First, let's go over three particular things I want you to consider quickly. Those are, what are your current sources of income? You probably have one but who knows you maybe have more than one? What are your spending habits? What do you like to spend your money on these days? And let's take a general look at all of your expenses, including necessities and including just the things that you like.

To spend money on for an entire month period. First of all, what are your current sources of income? That just means what money is going into your pocket? list those different sources on piece of paper now? Do you have a part time job you have a full time job? Do you get any money from parents or from any other source.

And along with those sources, list the monthly amount that you get from each now if it varies month to month, go ahead and put down an average. Next, I'd like you to get out your weekly expense tracker up here. I asked you to track yourself over any given week, I wanted you to put in the expenses that you have incurred for each day of the week, Monday through Sunday. Get that out, and let's take a look at it. As you scroll through it, do you notice any patterns of spending? Which expenses?

Do you really need? Which expenses? Would you consider essential that you really can't do that? Take a moment, look at those expenses. And make a note somewhere you can either make a note on the right or left, but identify those clearly those expenses that are necessary. What should be left over or what you would consider unnecessary?

Now, take a close look at those considerably unnecessary expenses. How much do you really need those? Do you think that you could possibly do without those expenses or minimize them in some way that should be one of your goals now is to somehow minimize or just completely get rid of these unnecessary expenses, although of course, you want to keep some because what's the fun in life without having some fun? Write. Next, I want you to be able to identify and list on that piece of paper all of your expenses for a month. In essence, this is the money out of your pocket.

Try to list each one as best possible. And don't worry, later, you might think of a few more and just add them to your list. Include the items that are on your weekly expense tracker, and any other items that are not on there because of course, you probably have more expenses that you didn't incur over that last week. By now, you should have a pretty clear idea of all of your sources of income, and a pretty clear idea of all of your expenses for any given month. Next, what I want you to do is get out the Excel spreadsheet that I've supplied for you. It's your personal monthly budget, Excel spreadsheet, looks something like this.

What I want you to do is take the time and fill this out as best possible Put in your income, list as many expenses as you possibly can. Now, if there are any line items on the left that aren't there, but you want to put in Go ahead, change the Excel spreadsheet. And finally at the bottom, we're going to see what's the difference between your income and your expenses. And what's the difference between your expectations and your actual spending. Let's do some of this together so you better understand this particular worksheet. I've opened up my copy of my personal monthly budget.

Now it's blank because I'm going to go ahead with you and try and fill in some of the categories. Let's work with income first. Now, assuming that you're a university student with a part time job, just for demonstration purposes, let's assume that you're making about $30,000 a year From a part time job, you're working hard to pay your bills and save money. So that's about $2,500 per month. Do you get any money from your parents? Well, let's say you're lucky, and you get 500 per month.

Congratulations. Now, I'm not going to put anything else in here. If this applies to you go ahead and fill in these sources of income for yourself. We're going to assume now that this particular person is making $3,000 per month, not bad, especially for a student. What about expenses? Maybe you don't need to pay for tuition.

Perhaps you're lucky enough to have a parent pay for it. Let's go down to some obvious stuff. Maybe you need to pay rent, let's say $300 for rent, and you have credit card payments, you know who doesn't? Let's do another $300 for credit cards, food $200 per month, loan payments, maybe not computer equipment, dorm books, maybe, maybe not. Let's see, let's go down to your phone bill, how about $50 a month? Maybe you have a car, let's say $300 a month, few $50 a month.

Unhealthy habits, you know, entertainment, let's have a little bit of fun. Let's go $100 a month and unhealthy habits. I don't know what those are. It depends on you, let's say $100 a month. Maybe you need to buy a few gifts every once in a while. $50 a month.

You want to buy some clothes, let's do $50 a month. Laundry $25 a month. And savings and this is important. You want to put money into savings. It's crucial. We're talking about that pretty soon.

So let's say to $200 a month. Okay, let's go back up. Maybe we have a few more expenses to make this a little more realistic. Let's say school supplies $50 a month groceries $100 a month cleaning supplies, among other things. $50 a month. utilities.

Hundred dollars a month. Internet $50 a month. Travel who knows where $100 a month $25 a month on average car repairs that's put in just in case for emergencies. $25 a month. You're going to get sick every once in a while. Let's just say $25 a month.

And let's leave it at that. So if we compare our total income $3,000 coming into our pockets, and then our expenses, our projected expenses $2,250 per month we ended up with extra money, about $750 per month. This is our projected income. This is our budget. Now, realistic or unrealistic that will depend on your own situation. Now that you have your projected amount, you'll go through the actual month and put down How much did you actually make?

Maybe you didn't get to work as much. Maybe there are a few issues 2000 but we can still depend on good old mom and dad, right? So let's put in 500. Now we're at 2500 is the actual amount we made for let's say, this was in January. But your expenses really could change quite easily from your expected amounts. What can we do?

Maybe housing rent is going to stay the same. credit card payments, maybe you had to purchase something bigger. So let's say 400. Maybe you're hungrier than usual in the month of January. You did extra stuff. You spent a little extra money.

You spent more in school supplies. groceries was more than expected. Housing supplies was about same. Utilities went up because it's cold. You had to put on the heat hundred and 50 your phone bill, you talked a lot, let's say 70. Internet, it's about the same.

You travel a little bit more because it's the holidays, let's say 250. That's a lot. car payment is still the same. Car Insurance is the same. car repairs. Maybe you had an issue with your tires.

You had to put down some extra money on a new set of tires. $500 Oh no, that's an emergency. I was talking about earlier. Fuel, let's say because you're traveling a little bit more. Let's say it's 100 Entertainment was about the same. unhealthy habits about the same maybe medicine.

You're lucky You're you felt great, you didn't have to buy any medicine, no doctor visits. gifts, it's the holidays a little bit more clothing. Zero, you didn't spend any because you're already buying other people's gifts. Laundry, you got to stay clean, let's say about the same. And we always got to put in at least $200. So now comparing our projected to our actual amount, now we're $720.

In the hole, we spent too much. Maybe we have credit card debt. This is the purpose of creating a budget. As you create a budget, you're going to be able to better control your expenses based on your expectation of income. That way, you don't get deeper into debt, and you're still able to transfer money to your savings and investments. So this is a really crucial spreadsheet to have, make sure that you take the time to understand it won't take you very long at all.

But take the time to put in the right line items for your income and your expenses so that you can have better control over your personal finances. So now that you have a better idea of your income and your expenses, fill out this personal monthly budget and continue to do so on a regular basis. Go ahead and make this homework for yourself. You will appreciate that you took the time and effort to do so. So to recap, this particular lesson, we've been able to identify your economic goals. You're able to identify money going in and going out of your pocket.

You're able to identify spending habits and things that are necessary and unnecessary. You can now adjust your expenses to reflect your economic goals. You can minimize unnecessary fees expenses. And most importantly, you're able to control all of this through your own personal budget. So that does it for this lesson. Let's get ready for the next one saving strategy.