Building Your Budget part 2

What should you understand before building a realistic budget?

How much money is coming in and how much money is going out.

What is a common mistake people make when creating a budget?

Creating a budget without first tracking their actual expenses.

What should your first budget be like?

Realistic rather than overly aggressive.

Why is creating a realistic budget important?

It helps you build good financial habits and create momentum toward your financial goals.

What is the Zero-Based 3-Bucket Budget?

budgeting method that allocates every dollar you earn into essential expenses, financial goals, or non-essential expenses.

What are essential expenses in a 3-bucket budget?

Necessary costs of living, such as housing, insurance, groceries, and transportation.

What are financial goals in a 3-bucket budget?

Money allocated toward savings, investments, and debt repayment.

What are non-essential expenses?

Spending on things beyond basic needs and financial goals, such as restaurants, shopping, travel, activities, and entertainment.

What is the order of priority in the Zero-Based 3-Bucket Budget?

Essential expenses → Financial goals → Non-essential expenses.