A budget is a plan for money that has not arrived yet. It is written before the month, not after it.
Step 1: Let's Learn
Read it, or press Listen and follow the words.
Fixed expenses
Rent, loan payments and insurance stay the same each month. They are predictable and hard to change quickly.
Variable expenses
Food, fuel and entertainment change month to month. This is where adjustments are actually possible.
The balance
Income minus expenses is the surplus. A negative surplus is a deficit, and it must be closed by cutting or earning more.
Pay yourself first
Treat saving as a fixed expense taken at the start, rather than whatever happens to be left at the end. There is rarely anything left.
A common guideline
A widely used rule allocates about 50% to needs, 30% to wants and 20% to saving and debt. It is a starting point, not a law.
A budget is a plan, not a record
Recording what you spent is bookkeeping. A budget assigns income to categories in advance, so the decisions are made before the money is in hand rather than after it is gone.
Fixed, variable and periodic
Rent is fixed, groceries vary, and insurance premiums arrive occasionally. Periodic costs are the ones that wreck budgets, because they are forgotten until they land. Dividing them by twelve and setting that aside monthly prevents it.
The budget must balance
Income minus planned spending minus planned saving should be zero. A plan that does not balance is not a budget — it is a wish list, and the shortfall becomes debt by default.
Budgets need revising
The first version will be wrong, usually underestimating variable costs. Comparing plan against actual for a couple of months and adjusting is what turns a guess into a working plan.
Step 2: Try It Yourself
Tap and try it out.
Housing
Food
Transport
Saving
Housing has the most. It has 700 more than Transport.
Step 3: Watch an Example
One step at a time.
Watch Diego Balance a Month
Diego takes home $2400. Rent is $1000, food $400, transport $300 and other $500.
- Step 1
He totals the expenses: 1000 + 400 + 300 + 500.
Step 4: Your Turn
Practice makes it stick.
The Surplus
Problem 1 of 2
Income $2400, expenses $2200. What is the surplus, in dollars?
dollars
The Deficit
Problem 2 of 2
Income $1800, expenses $2000. What is the surplus, in dollars?
dollars
Plan the Month
1 of 8
Income $3000, expenses $2600. Surplus in dollars?
2 of 8
Expenses $900, $250, $180 and $120. Total in dollars?
3 of 8
The 50-30-20 rule on $3000 net. How much to saving, in dollars?
4 of 8
Same rule and income. How much to needs, in dollars?
5 of 8
Income $2000, expenses $2150. Deficit size in dollars?
6 of 8
Rent $1200 out of $3000 net. What percentage is housing?
7 of 8
Sort each expense by its type.
Tap something to move it.
- Empty
- Empty
8 of 8
The 50-30-20 rule on $4000 net. How much to wants, in dollars?
Step 5: Quick Check
Show what you know.
Question 1 of 2
Income $2800, expenses $2500. Surplus in dollars?
Question 2 of 2
What does "pay yourself first" mean?
What You Learned
- A budget plans money before it arrives.
- Fixed expenses stay constant; variable ones are where adjustment happens.
- Treat saving as a fixed expense taken first.