Creating A Budget

My first question to you is, how much do you spend each month on household expenses? If you don’t know, I would recommend that you create an excel spreadsheet that lists all your expenses (i.e. mortgage/rent, car note, credit cards, insurance, student loans, cable, electricity, gas, phone, cell phone, water, etc.). You should also be tracking how much you spend each month on each bill.

In addition to your household expenses, establish a monthly budget for your groceries and entertainment. Next, determine your total monthly household income. Now, subtract your total expenses from your total income (Hopefully this is a positive number). If this is a positive number, this is considered your discretionary funds. My recommendation is that you put a percentage or certain amount of your discretionary funds in some type of savings account. This savings account can be used for your emergency funds. Each household should have 9 to 12 months of monthly expenses saved in case of an emergency or life changing circumstance (i.e. sickness, losing a job, etc.).

If you are already doing this, CONGRATULATIONS! You already have “The EDJe On Building Wealth.” If you do not have a household budget, NOW would be a great time to start building wealth.