Examine the four major ingredients of a good budget:

Sources of income:

   Fixed expenses:

•  Housing and transportation are typically the largest fixed expenses you will have. They include everything from rent, mortgage (house payments), car payments, car insurance, or public transportation fares. Other fixed expenses include any bills, such as a phone bill, in which you are obligated to pay the same amount every month.
• Insurance is vital to protect you from financial disasters. This can include medical, dental, lost wages, and auto or renter’s insurance.
• Debt: This area should cover monthly bills for credit cards, student loans, and other loans you may owe.  
• Savings and/or investments: Think of your savings as the place for short-term goals or your fund for true emergencies. Investing is a long-term plan for making your money grow  

   Variable Expenses:

• Utility bills that vary each month depending on seasons or usage, such as power, gas, water, cellular, and long distance phone bills.  
• Auto expenses include auto maintenance, repairs, and fuel. You will have to estimate these based on past expenses, and it’s a good idea to average these expenses out each month, so that you have money put aside if there is a big fluctuation.   
• Personal needs: This area needs to cover all of your personal expenses such as necessary clothing, food, hygienic products, and school expenses such as fees, school supplies, and books.  

   Flexible or discretionary expenses:

• Entertainment expenses include concert, sports, and movie tickets, dining out, or hosting a party, to name a few.  
• Travel such as weekend trips, school field trips, and extracurricular trips or outings.  
• Hobbies such as sports, art, kayaking, or playing an instrument.  
• Clothing, including shoes and accessories, can get very expensive, and there is a fine line between the things you want and things you really need. This is a big challenge for many people.  

Charitable giving, or tithing, for many people is a priority, and some people include this as a fixed expense. If it’s important to you, it’s a good start to get in the habit of giving regularly by making a place for them in your budget.