BUDGETING
The idea of the need for a balance between needs and wants is the building block to financial stability! Needs are basic food, shelter, transportation and clothing that you need to get by.
Wants are things that you desire, but many not necessarily need to get through the average day.
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A budget is an estimate of income and expenses for a period of time. Basically, it’s a planner that balances what money you bring in (whether that be from a job like babysitting or a birthday gift) and what you spend. Categories in a budget can include food, transportation, entertainment, and clothing. For adults, it can also include rent and insurance.
A budget can also be sorted into the categories of how big and impacting a purchase is. These categories are spend (short-term), save (intermediate-term), and invest (long-term).
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The six buttons below represent six items that a person may want to buy. They are not categorized to be a need or a want, as they can be either depending on the situation. For example, a person who runs a lot see a new pair of sneakers to be a need while others may consider that a want. Hover over the buttons to see their actual cost.
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$6.50
Burger King meal
In a budget, purchases must be prioritized so that your needs, and then your wants, can be obtained. Although a new shirt may be appealing, finding out its cost may change your choice of whether to buy it or not! If your daily budget is $20, a $14.99 shirt may not be the best purchase! However, if your budget is $50, that same shirt could be bought. Saving money allows for bigger purchases to be made. If you want to learn about saving and investing your money, click the Achieving Wealth tab in the Topics Covered section.
