How To Build A Budget
? a budget is the difference between being financially responsible and floating with financial ?. debra has made wise decision to create a budget to organize her finances and prepare for any financial emergencies. her first step is to determine her net income. the net income is how much money debra has left over at the end of the month. this amount is found by using the following equation. total revenue minus total expenses equals net income. debra's revenue is all of the money that she makes in a month. this includes income sources like wages, bonuses and investment income. usually, these sources are consistent on a monthly basis. debra's expenses include all of the monthly bills which are broken down into two categories, fixed expenses and variable expenses. fixed expenses are the payments for bills that are the same every month such as mortgage, insurance, car loans, cell phone and cable bills. debra's variable expenses are the bills with different totals each month such as entertainment, groceries, gas and utilities. debra can now deduct her fixed and variable expenses from her revenue. if her revenue is higher than her expenses, she has net income. debra can use her net income to build an emergency savings account or invest in her retirement. if her expenses are greater than her revenue, debra has a net loss. debra must reduce her variable expenses to balance her budget or she will need to find a way to reduce her fixed costs such as downsizing her home. by tracking your total revenue and expenses, you can build a budget that quickly determines if you have money to invest or save, or if you're living beyond your means.
- net income・・・純利益
- net loss・・・純損失
- beyond one's means・・・収入の範囲を超えて