Lesson 7-1: What is A Budget?
Attempt: 6
Introduction
"The budget is God."
Slogan at Topcom
Our household budget is skewed with housing and transportation accounting for 50% of our spending and food another 13%. Everything else paid for with the remaining 37%. So, a person making $24,000 a year while spending $36,000 faces a $12,000 deficit. If 60% goes to housing, food and transportation that would leave $9,600 for everything else, making substantial cuts to their primary spending categories a necessity.
To balance the budget, we must increase income or
cut spending. The solution lies in choosing the strategy that has the most
opportunity to solve current problems and limit future ones. Over the short term a combination of both may
be necessary but the key to long-term success is finding the right combination
of revenue enhancement and spending cuts.
This chapter focuses on not only building a budget but strategies to
maintain and manage that budget for your long-term success.
US Department of Labor's Bureau of Labor Statistic's Consumer Expenditures - 2014