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Budgeting and Goal Setting

You may be earning money at a job or you're receiving support from your parents. Either way, like most people in the world, you're living on a fixed income. To survive on a fixed income, you need to be smart about your budget and setting achievable financial goals.

Are you contributing to the family auto, but want to save for your own car? Do your parents pick up your hair and beauty items and clothes at the store now, but are making you responsible for all personal purchases when you start working?

You can prepare for these financial changes while you are still on your current income with some tweaks and sacrifices.

  1. Record your income from all sources—jobs, parents, gifts.
  2. List out all your expenses—fixed and discretionary.
  3. Subtracting the expenses from the income gives you your working capital to achieve your goals. Putting that money aside into a savings account that earns interest will help you reach your goals.

Not satisfied with how long that will take? You have two options:

  1. Increase your income. Get an additional job or a higher paying job. Or sell something to make instant cash.
  2. Decrease your expenses. Can you pack a lunch instead of buying? Can you forfeit your weekend movie marathons or the annual ski trip? Can you downgrade your phone plan or cancel a magazine subscription?

With the additional money earned or saved, you can make great strides in reaching your milestones and achieving your goals.