![]() These expenses may change over time but usually they stay fairly level. Fixed expenses are things like your mortgage, property taxes, phone, utilities, etc. There are two types of expenses the first one being fixed. ![]() How else do you know what you are really spending? Did you stick to your budget? Was it realistic? When you create next year’s budget should it be adjusted? Yet this is the key to good money management. The next step is to track it!ĭo you track your budget? Some people take the time to create a budget but I would venture to guess that very few track it. The big mistake is that most people stop at this point. If you don’t use a budget, start by creating one don’t worry about getting it perfect as you will adjust it as you go. Typically the more money you spend in a category the more important it is to you. ![]() Not sold yet? Okay, at least humour me and read the rest of the article.ĭo you use one? A budget is simply a tool to make decisions about what your priorities are. If used properly it should give you control over where your money is allocated. Each person typically has a latte factor, the question is how big is it?īudgets are typically greeted with mixed emotions I would propose that we should embrace this fantastic tool and use it to its fullest. You may not even know how much was spent. The “Latte Factor” is when you have missing money each month and you have no idea where it went. Does your income keep going up but yet there is no extra money at the end of the month? Do you know where your money has gone? What happens in retirement once your income is fixed? No matter how much money one makes you can always find a way to spend it.
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