How To Manage Money

Managing Credit & Building Credit > How to Manage Money

How to Manage Money

One of the most important phrases you may ever hear in life is:
"It's not how much you make, it's how much you keep."

So what does that mean?

For a lot of people, their issues are not with the amount of money they make, but rather how much they are able to save with responsible management of their money.

So how does one manage money responsibly?

The Power of a Budget

"A budget is an estimation of income and expenses over a specified future period of time. It is usually compiled and re-evaluated on a periodic basis.

Budgets can be made for a person, a group of people, a business, a government, or just about anything else that makes and spends money."

A budget is one of the most important tools to managing money, yet almost HALF of all Americans do don't have a budget.

How to Create a Budget

A simple budget is made up of 2 major components: Income and Expenses.

• Income is money coming in such as wages, child support, dividends, interest and rent.

• Expenses are money that goes out such as Housing, Transportation, Groceries and Utilities.

• Subtract your Expenses from your Income to find your Net Income.

A powerful yet simple way to budget is the 50 - 30 - 20 method.

• 50% of your income goes to Needs

• 30% goes to Wants

• 20% goes to Savings