Budgeting, Saving, and Spending

Budgeting, Saving, and Spending

After earning your first few paychecks, you want to get handle on your expenses so you can start to plan for the future. Building a budget is more than just listing out the bills you know are coming and trying to plan around that – it is about fundamentally understanding your Wants and Needs, and what types of expenses are Fixed or Variable over time.

As you start to get a handle on what kind of spending you should expect every month (including those pesky un-planned expenses that eat up a large chunk of your spending), your attention should go to how stretch your spending farther per dollar you earn. You start to research your purchases – starting by looking up how to find the best deal on a new smartphone. A quick Google search gives over 1 billion results – after reading through the first 20 pages reviews, you become acutely familiar with both the concept that there is both a cost and benefit to researching information (and a limit to how much research is warranted for a given purchase), and that a product’s marketing can have a significant impact on your preferences on what you want to buy. While you know your preferences are different than others, there are still some solid rules to follow with planning how you spend.

This unit will focus on how to build your first budget or spending plan and understand how to get the most out of every dollar you earn.

About Kevin Smith

Kevin is the content manager for Personal Finance Lab and is from Chicago, Illinois. He has a Master's Degree in Economics from Concordia University in Montreal, Canada. In addition to an economics background, he has also built training manuals to prepare finance companies for licensing requirements in mortgage loan origination and insurance sales.