How to Create a Personal Budget

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To create a personal budget, list all fixed and variable expenses on a template, and then apply your income to cover those expenses. Try to create a personal budget that results in left over money with tips from a registered financial consultant in this free video on money management.

Part of the Video Series: Money Management
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Video Transcript

This is financial adviser, Patrick Munro, on how to create a personal budget. A personal budget is a budget, just like it says, that's personal to you. Every individual has expenses and income. Those are the two items that they have, and, hopefully they have more income than expenses resulting in a net worth. The goal of everyone is to have the highest net worth possible. So it's important in your budget to list your liabilities. And liabilities are fixed, firstly, which are rent and mortgage, shelter if you will. Then there's food, as well, that goes into that component. Utilities, all the basic necessities of life, including clothing and whatnot. And of course, in addition to that are variable expenses. These are credit cards. Various miscellaneous bills that come into the mix. So once you have your expenses, both fixed and variable in place, then you apply your income. And your income should be sufficient enough to pay both of those and also have excess money left over for investment. Always pay yourself first, and it's important to pay yourself first by having a great personal budget. This is Patrick Munro, financial adviser.

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