The importance of Budgeting A fool and his money are soon
parted
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Who is this??
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Some Highlights. Professional NBA Basketball Player Rookie of
the year in 1996 4-time scoring champion 11-time NBA All-star
2-time All-star MVP League MVP in 2000 Shoe deal with Reebok Earned
over $200 Million over his career
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Some Lowlights. Terrible gambler, banned from many casinos
Bought millions of dollars worth of jewellery, on CREDIT Costly
divorce from his wife of 8 years
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The end result? Declared Bankruptcy Some of his monthly
expenses STILL include $10,000/month on clothes, $10,000 on
entertainment and $1,000 on dry cleaning No savings/investments No
longer playing
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A budget is A plan for WISE spending based two things: Income
and Expenses Organizes and controls finances Helps realize goals
and makes money work for you
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A budget is not. Penny pinching or going without Hard to make
Set in stone
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Where do you start? First you need to Identify and calculate
the amount of income you expect to earn. The total amount you
calculate is known as GROSS income.
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Step Two Calculate your expenses. Two types of expenses: Fixed
and Variable In the following list, lets identify which classify as
fixed or variable expenses: SavingsInsurance Rent MortgagePhone
bill Oil Change Car payment Groceries ClothingGifts
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Step 3 Calculate the difference between your income and
expenses. If the value after this calculation is positive, you are
UNDER budget, and your income Exceeds your expenses. If the value
is negative you are OVER budget and your expenses exceed your
income You want your budget to balance!