state the various essential elements of budget
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The various essential elements of budget are:
- Every budget's most basic component is income.
- We should keep track of our earnings and where they originate.
- Make a list of your pre-tax and after-tax income.
- Fixed expenses are those that you have limited control over or cannot change.
- For example, your mortgage is a fixed cost, however, your Netflix membership is not.
- Once you've removed the value of your fixed expenses from your income, you'll have a better notion of the third basic element: flexible expenses.
- Flexible costs are products that you want to buy but don't require.
- Purchasing concert tickets, going out to dinner, and buying new clothes are all examples of flexible spending.
- Savings and unexpected costs Unexpected expenses, such as medical bills, as well as savings, should be included in your budget.
- It's best to keep these accounts distinct. If you can avoid it, even in an emergency, don't dip into your savings.
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