Budget:
1. DECISION
MAKING PROCESS.
2.
A method to
reduce financial stress.
3.
A short term plan
on how you will spent your money over the next year with some long term
considerations, like, college, buying a house, retirement.
Category:
1.
The term used for
identifying each part of a budget.
2.
Similar to a cost
code in a business.
Cash Flow: Money you expect to receive on a recurring basis,
ie, salary, and is basis for your budget.
Irregular Income:
1.
Some jobs do not
provide a consistent income, ie, commissions, piece work, trucker’s mileage.
For this type of income money must be set aside when the income is higher than
average. When the income is less than average, the set-aside funds are used to
bring up the lower income to the expected level. The expected level is your
budget-basis.
2.
Money you may
receive periodically, ie, overtime, but it cannot be part of your financial
basis for you budget. However it should be handle responsibility.
Bulk money: Money you might receive infrequently, ie, income tax
refund. This money can be used for one time purchases that your cash flow
cannot afford. OR it can be set aside for future needs.
