A Budget is a plan for dividing income among spending and saving options. It can help you achieve more of what is important to you in your lifespan. Your budget is based on your financial goals and life-span plan

Choosing Financial Goals

1. Short -term goals are things you hope to achieve within a year.  Short-term goals don’t usually require lots of money and don’t have a great impact on your life.  But short-term goals can be used as steps towards achieving a life-span goal.  You should avoid spending so much on short-term wants that you are unable to achieve the long-term goals that are part of your lifespan plan.
2. Long-term goals are things you hope to achieve in more than a year.  Long term goals usually require more money than people can set aside from current income.  Examples are purchase of car, house, marriage plans, education plans and retirement plans.  You need to prioritize your goals to focus on those most important to you. 
3. Achieving your lifespan plan depends on many things.  Controlling short-term spending is one of the most crucial. 
4. The goals you set affect you, your family, and your future family. When you set goals, consider the impact on other people.
5. may be able to set up an automatic saving plan with your employer or bank.

Track Income and Expenses

1.  By keeping records of your income and spending, you can see where your money goes.  With this information, you can estimate your income and spending for your budget.
2. Your paycheck slip is an income record.  Some income has no written record, so you may need  to make one by listing your income and the sources of it/
3. Your spending records include sales receipts, credit card statements, and your personal checks.
4. To keep your records straight, you should establish a filing system.  To be useful, your filing system needs to be organized, complete and easy to find. Computer applications are helpful in doing this.
5. Expenses are either fixed or flexible.  Fixed expenses are amounts you have already committed to spend.  You have no choice but to pay them.
6. Flexible expenses are amounts you can choose to spend or not to spend.  Luxuries are always a flexible expense.
7. The purpose of keeping financial records is to use them to help you plan.  With good financial records, you can compare what you want to do with your income and what you are actually doing.

Your Budget Worksheet

1. A budget worksheet is a planning document on which you record your expected and actual income and spending over a short time, usually a month.
2. Your income is a limited resource.  You can’t buy everything you want.  A budget will help you use your money for the things you want most.
3. A budget worksheet is a short-term planning document that usually covers one month.  You record your actual and expected income and spending for the month.  Then you compare to see if your estimates closely match your actual income and spending.
4. The steps for complete a budget worksheet are (1) create the worksheet form, (2) estimate and record your expected income, expenses and saving, (3) record your actual income, expense and saving and (4) calculate the differences between expected and actual amounts.

Create Your Budget for the Year

1. Evaluate your completed worksheet to see how you are using your income. Make adjustments if necessary.  Remember that when you reduce spending, you can cut back only on flexible expenses.
2. Create several worksheets so that you can choose from several plans.  There is no one right way to use your income.  The best way for you depends on your goals.
3. To achieve life-span goals, you need a long-term plan to project income and spending for a year or more. One way to create a budget is to first do a worksheet for each month of the year. Then combine them into a budget for the year.
4. Your income and spending may not be the same for each month (example, insurance payments, Astro payments).  Include these uneven cash inflows and outflows in your budget.
5. If you live in a family, you may need to make adjustments in relation to family income and family spending.  Planning the family budget together can give everyone a voice is the trade-offs the family makes.