From the course: Finance and Accounting Tips

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Steps in creating a personal budget

Steps in creating a personal budget

From the course: Finance and Accounting Tips

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Steps in creating a personal budget

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- A recent study reports that if a family in the US were hit with an unexpected bill of $500, only 40% of those responding had the money on hand to handle that bill. Too many living too close to the financial edge. Now, is the cause too little income, or too much outgo? Everyone would say that if they just made a little more money, all would be well. They would build a financial buffer which would allow them to handle these unexpected mishaps. Well, I hate to be the one to break it to you, but that's typically not how it works. It turns out that most of us, when we get just a little more income, adjust our spending habits quickly up. In other words, we quickly spend that increase, and then find ourselves living on the financial edge again. Well, what to do, what to do, what to do? Well, step one is to accept the likely reality that until you get a handle on your expenses, incremental increases in your income are not going to solve your financial problems. Best to focus on getting your…

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