24 What are the steps involved in creating a budget Solution

24. What are the steps involved in creating a budget?

Solution

Basic steps involved in creating a budget are as follows:

1. Calculate expenses: one should calculate the probable expenditures they need to make or they usually would be expecting to make in the given period

2. Know your income level: this tells you how much you can afford to spend

3. Saving and loan repayment: what\'s your desirable level of saving gives you clearer pictures about how much you should spend. If a fixed amount of money is to be given away in order to repay a debt, that should also be considered as that would eat away a good chunk of income

4. Keep a track of progress to analyse if things are going as planned