One of the most important personal finance tools is a budget. Budgets list income from a particular period along with expenses.

Having a budget helps to manage spending amounts and facilitates a better overall financial picture.

There are many resources available to create a budget such as spreadsheets, banking companies, and mobile apps.

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The most important item on the budget is income, which tells how much is coming in during that time period.

Housing is typically the largest expense. It includes items like your monthly rent/mortgage payment, insurance, internet and cable, along with property taxes and other expenses.

Healthcare expenses include items like health insurance premiums, medications from your pharmacy, and other expenses.

Transportation is another large expense. It includes items like parking costs, gas, car payments, car insurance payments, and other expenses such as maintenance and repairs.

Food expenses include items like your grocery shopping trips, eating out, and other expenses.

Uncategorized expenses include items like child care, entertainment, charity, clothing and shoes, and subscription payments.

Finance is a very important expense, although is it not essential. It includes items like monthly savings and investments. This category may include contributions to your child’s college fund or your retirement plan.

Once all expenses are accounted for, add them up and subtract them from your income. This will result in a money surplus (more income than expenses), break even, or deficit (more expenses than income).

It is important to keep your expenses at or below your income amount to keep from overspending.